Insurance help!

Discussion in 'Business Operations' started by TheSandman, Jan 23, 2014.

  1. gulfjoe

    gulfjoe LawnSite Bronze Member
    Messages: 1,638

    What about the PT mowing ops? I drive my truck to work from 0500-1600 then mow from 1600- dark. What options do you recommend for these types of people?
  2. unkownfl

    unkownfl LawnSite Gold Member
    Messages: 3,837

    Ok, you can use personal vehicles for business no problem. Pizza hut does it every day etc etc...
    Make sure your personal auto policy is notified that you use the vehicle for business use. You do not need commercial auto policy usually depending on the company. State Farm FL does not require business use for vehicles under 10k GVW and used less than 50%. If you're really worried about liability coming after your mom, have her get an Umbrella insurance policy. Usually the coverage is around 1 mil in coverage but I would only suggest that if she has something to come after. A mom strapped in debt making 30k a year is not going to be what lawyers come after as there is nothing to take. If she makes a little more than that they could garnish her wages for ever and yours too but this is only once all insurance policies have been exhausted.

    Now for putting the truck in the business name, it will need to be paid in full and the state will have to allow a LLC to hold the title. If you're cosigning the loan personally to put it in the LLC it would be the same thing liability wise as owning it personally. I know your new formed LLC will not be able to get a bank loan for a duramax. You can't simply give it to your LLC your state will want tax on the transfer and it will need to be the honest value of the truck. Now the IRS is going to count this as a Draw or distribution depending on the LLC taxing structure and will be subjected to income tax.

    Now tax wise you can take standard mileage in either situation which is $0.565 for 2013 per mile. Now keeping it in your LLC you may be able to save on taxes if you lease the truck to the LLC take depreciated value and cost of maintaining it I don't know what is best without numbers in my face and I'm not a CPA. You would then pay income tax on the lease payment it gets messy that way and at .565 a mile on a used vehicle is what I do. If you get 12mpg thats 6.78 per gallon with standard mileage and it doesn't cost me that much to operate.
    Last edited: Jan 29, 2014
  3. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    States differ so much, be careful with your advise from people out of your area. Here if you get in an accident delivering pizza in your personal vehicle and your auto insurance finds out they can deny the claim and also the claim of any other vehicles/property you damaged. The driver would then have to submit to pizza huts insurance for damages. Similarly if you're injured in that accident, your insurance won't cover it here, they will pay per your policy but will then go after pizza huts gl for reimbursement. I can't see my earlier post so I don't know if I posted the link up there, but do a search of my posts for the term "Lexus" I've posted the story as a warning here a few times. Look for one of the older posts,reading it should convince most people to be 100% sure they are properly covered if using a personal vehicle for business

    Here you can also transfer any property from your personal ownership to the company without paying a second sales tax. You just have to do the transaction within 6 months of establishing the llc

    One big thing you will see different between the post I quoted and all mine on this subject, is I am sure to constantly say "here", the above poster speaks generally as the laws and/or regulations are the same across the country.
  4. unkownfl

    unkownfl LawnSite Gold Member
    Messages: 3,837

    1) Didn't notify the carrier before hand of intended business use. I'll say this again an additional Umbrella policy.
    Furthermore, Business owners who choose the LLC organizational structure often do so as a way of shielding personal assets from business liability. Because the LLC structure shields owners of personal liability for business debts and lawsuits, owners who retain personal ownership of a vehicle can protect that vehicle in the event someone sues the LLC. If a business owner sells her vehicle to the business, though, the car legally becomes private property owned by the business; under this arrangement, a successful lawsuit by an injured customer or a creditor may claim the vehicle as an award. Also, Get some sort of proof you notified the insurance agent of the intended use of the vehicle. They (insurance agents and brokers) have a policy that a consumer can go after if the agent didn't do his job right. It's called errors and omission coverage. Basically it's in the agent/brokers best intrest to provide you with the right policy as long as you give the full disclosure on the intended use(s) of the vehicle.

    2) I stated to check within the OPs state about vehicle transfers. I will get further into this and say this, the IRS considers using the business vehicle for personal use as income and you will have to claim this if you register it under the business. There is no way in hell you're going to convince the IRS that your Duramax is 100% business use.

    The IRS is obviously not going to vary state to state much. The liability of your company and exposure to your personal assets and vice versa are going to be at the State level mostly.
  5. gulfjoe

    gulfjoe LawnSite Bronze Member
    Messages: 1,638

    ^^^^^I am also an LLC. What do you recommend.
  6. TheSandman

    TheSandman LawnSite Member
    Messages: 25

    If I am the only worker under my company, do I need a workers comp policy?
  7. gulfjoe

    gulfjoe LawnSite Bronze Member
    Messages: 1,638

    Bump because I would love to see that last 2 posts answered by someone knowledgable!!! :)
    Posted via Mobile Device
  8. jeeperscrow

    jeeperscrow LawnSite Senior Member
    Messages: 288

    Don't believe you need one if you are the only employee...or at least I don't, but I'm not an LLC.
  9. TheSandman

    TheSandman LawnSite Member
    Messages: 25

    The guy I am subcontracting for told me that I either have to have workers comp or they are going to charge him thus he having to pay it for me... Help!
    Posted via Mobile Device
  10. FLC2000

    FLC2000 LawnSite Bronze Member
    Messages: 1,986

    99% of the time the only way you need to insure under your business is if you have employees and they are driving it.

    It doesn't matter if you have it insured under personal or business. If you are driving it then its covered.

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