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Insurance Requirements - For New Business.

Discussion in 'Starting a Lawn Care Business' started by Lakeview, May 18, 2003.

  1. Lakeview

    Lakeview LawnSite Member
    Messages: 63

    I did a topic search for but did not find all the info i needed.
    I have several issues to address concerning the purchase of insurance relating to the lawn care business.

    The First Issue:
    Several years ago i was just starting out in manufacturing and sales. I had stores lined up to accept my products and three months prior to the purchasing season i was involved in a single vehicle automobile accident. The result of which i spent six days in the hospital and was not physically capable of manufacturing the product nor delivering it to my customers.
    I had liability insurance on my vehicle but however it only covered x amount of my medical bills from the hospital stay and the rest i had to pay out of my pocket over a period of five years. Things were tight. I worked minimum wage jobs and at least 1/2 of each dollar i earned went to hospital bills.

    I do not want a repeat of this. How could i best protect myself in the event something like this happens again?
    Self employment/unemployment insurance?
    I am not familiar with this type of insurance.
    Isnt the cost based on a percentage of what you earn per quarter and if so doesnt it fluctuate accordingly.

    The Second Issue:
    I understand two types of insurance will be required for my business.
    One for commercial property which may require i carry enough to cover 1 million in damage.
    One for residential property which may require i carry enough to cover 1/2 million in damage.
    What is this type of insurance called and what does it usually cost per year.
    Shouldnt the commercial insurance coverage for 1 million in damage be flexible enough to cover residential work also.

    The Third Issue:
    Shouldnt each individual piece of equipment also have insurance coverage in case it should come off a trailer, catch on fire or get stolen in the field?

    Any Other Issues:
    Am i missing or overlooking any more important insurance related information? For example in the event of an accident whether or not vehicle insurance covers equipment being towed on a trailer.
  2. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

    As far as your personally policy to protect you, you need to look into a Long-Term and/or Short-Term disability policy. I carry a long-term policy on me.

    Personally health insurance should have taken care of most of your hospital bill. If you didn't have a health insurance policy then you need one NOW. Check out BlueCross/BlueShield about a personally policy on yourself.

    Business insurance is a General Liability policy. I have a $2 mil policy that covers both comm'l and residential properties. The attachment policy to a G/L is called Inland Marine. It is the equipment insurance. They will want a list of equipment that will be insured.
  3. Gr grass n Hi tides

    Gr grass n Hi tides LawnSite Bronze Member
    Messages: 1,020

    First issue:

    Regarding your MVA, sounds like what kicked in to pay part of the hospital bill was your medical payments, or "PIP" portion of your coverage. You should check with your auto insurance agent on increasing that coverage. It varies from company to the next. Could be $500 - $50,000 available. It's expensive, but again varies from one carrier to another. Do a lot of checking around before you buy. The great thing about medical payment/PIP coverage is that it pays your bills even if you are at fault for an accident. Completely separate from liability coverage.

    Also, insurance to cover your own income is called disability insurance. Rates for this coverage can be pretty steep too. Policies vary in what percentage of your income will be covered - from 60% - 80%, for example. This can be tricky for the self employed person because of course most folks try to reduce their tax burden as much as possible. Again, do a lot of shopping around. There's a pretty good web site - www.quotesmith.com where you can get some quotes online. It's just one place to get a start.

    Second issue:

    One liability policy should cover you regardless of where you're working - residential or commercial property. There's another thread a couple down from this one talking about the same issue. Check it out. I pay about $600/yr. for 1M policy.

    Third issue:

    You probably will not find any policy to cover theft of equipment. Kind of like getting run over intentionally by a guy driving a vehicle. If he runs you down, there's no insurance coverage for that. It's a criminal matter.

    "Fire & Marine" might be available to protect against fire damage to your equipment, but this type of coverage might also be sketchy. This would be separate from the liability coverage you buy. You MUST ask those questions specifically when you buy a policy, plus READ your policy. It will vary from one company to the next, what they will write. Insurance agents are supposed to act in your best interest when they sell you something, but that doesn't always happen. Make sure you are getting what you requested.

    If a piece of equipment comes off your trailer, your claim might be denied regardless of the coverage you have because you might be told you failed to secure your load.


    Read your auto policy and ask your agent if the policy covers your trailer/equipment. Don't assume the policy picks this up. Ask very specific questions & ask to be shown what part of the policy covers it.

    Really, one good insurance agent that knows his/her stuff should be able to set you up with everything you need. Shop around for price though.
  4. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

    This is totally incorrect. A General Liability policy has an attachment policy called "Inland Marine". Its an equipment policy. Its main protection is theft. It not only covers the equipment I own, but also any I borrow or rent. You need to call that agent and ask why he isn't looking after your best interest.
  5. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

    After reading my above post it did sound kinda harsh. It wasn't intended to be. It is just to late for me to edit it to sound better. Sorry.
  6. Gr grass n Hi tides

    Gr grass n Hi tides LawnSite Bronze Member
    Messages: 1,020

    You better bet I will!

    Oh, and you were not harsh. I appreciate the heads up. Good advice. I am calling my guy today.

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