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Commercial Accounts/ Bonded?

sgl41377

LawnSite Member
Location
Canton, GA
I have a small residential lawn service company and am looking to expand. Been in business 2 years. First year, 5 residentials, This past year about 20-25 regulars. I have license and insurance, but am not familiar with being bonded. What does that mean, how much does it cost? Do I have to be bonded in order to do commercial work? Any input would be appriciated.
 

GreenUtah

LawnSite Senior Member
Location
SLC, UT
bonding is more common in installation work as a form of insurance. It protects the owner from problems not currently known or visible. For maintenance operations, bonding usually only crops up as a way of narrowing the field, rooting out the wannabes and startups, if you will. Bonding requires a financial analysis of your business, your experience, manpower and equipment against the proposed job that you are bonding for. At two years, with such a small biz, it would be very expensive, if not impossible for you to bond for a large job without outside backing. For doing small commercial jobs, you won't likely run into that request, but you will need to make sure they can get a copy of your commercial liability.
 
OP
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sgl41377

LawnSite Member
Location
Canton, GA
Thank you for your response. I do have a follow up question. How much liability insurance should a small outfit carry, and how much should a larger outfit carry. I believe I have $300,000 worth of coverage right now. Is that enough?
 

GreenUtah

LawnSite Senior Member
Location
SLC, UT
How much is enough is dependent on the types of work you do, the exposure and your financial worth. 300 seems to be a reasonable number, but most commercial accounts may require 1 Mil. Other, larger clients may want up to 5 Mil. What you can possibly do that could cause that much damage and not be criminally liable(which the insurance wouldn't pay on anyway in that case), I don't know, but that is the way things are. lol your best bet is to talk it over with your agent, let him know what you are doing in detail and your personal situations, that will give you the surest number. Remember, insurance is to protect YOU, not someone else.
 

farmerphilco

LawnSite Member
The cost in premium from $300,000 to $1,000,000 is nil. A person would be crazy not to have 1mil coverage even personally. I have 2mil personal umbrella, 3mil prof and then a 2mil comm umbrella. the cost is nothing when you think about what you can lose. It doesnt matter if you do not have anything right now, you will have your future assets garnished. If you do not want to make anything of yourself then you are fine, if you do then insure yourself properly.
 


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