Why Do I need a license and insurance?

Discussion in 'Starting a Lawn Care Business' started by Shawnhines, Oct 14, 2006.

  1. Shawnhines

    Shawnhines LawnSite Member
    Messages: 76

    I am just starting out, and I am seeing that a lot of people are licensed and insured. What license do I need? (business??) What insurance do I need and why?

    Thanks for any input.
    Shawn Hines
  2. huh

    huh LawnSite Senior Member
    from Lubbock
    Messages: 251

    You need a business license so that you can open an account and deposit money and pay the proper taxes

    And yes sure you can just go down to the bank and put all your cash in your personal account, but after a while (especially if you take a lot of cash payments) the feds will get a detail of your account and think you are selling weed and not mowing lawns and come check you out

    So then you will have to drag the feds around to all the peeps whose houses you mowed to have them say yes he mows grass…not deals it

    Then the feds will say ok you are a mower not a dealer, but you do not have a business license so you must have cheated on your taxes and you surely did not send your estimated taxes in quarterly and therefor you owe us a chitload of taxes and penalties so then they will see how much cash is in your account and say that looks about right and take it….then just to kick you when you are down they will take your best mower too....so then you are like man no mower this sucks Im just gonna start selling swag on the side to get a new mower and you get busted and end up in jail :(

    As for insurance you need it because one day you will mow some jerks lawn and they will call 3 days later and say that you mowed over their cat or their child or scratched their Ferrari and want you to write a check for ten Gs so they can get an estimate on getting the kids legs sewed back on or the car painted…and of course you ain't got 10 large on you so you blow them off and skip the court date and then the guy wins by default and he owns all of your possessions and all of your earnings for the next 10 years so then you are like man screw this I got no mower no nothing I might as well just start selling fat sacks because the man has already screwed me then you get busted for dealing and you go down big time….but if you had just paid 400 bucks you would have an insurance company backing you up instead and they are so tight they would fight the guy tooth and nail for the 10K and then they would go after him for insurance fraud….and after he is in jail for fraud his smoking hot trophy wife would not have her "regular" and the lawn boy would start looking real good on those days she is out by the pool and next thing you know it is "confessions of a lawn boy 2006" and she is dumping the insurance fraud guy who is in jail for you and you got the keys to the Ferrari and a smoking hot trophy girl friend with cash and you are living large instead of in jail

    Hope that answered it for you
  3. JJLandscapes

    JJLandscapes LawnSite Senior Member
    Messages: 682

    The main reason my state forced landscapers to become licensed and insured is because of 9/11 they put down stricter rules so they know its harder to start illegal businesses and hide money....aka "funding terrorist organizations" im being dead serious also
  4. ATVracer

    ATVracer LawnSite Senior Member
    from Indiana
    Messages: 346

    Insurance protects you and the people you mow for. If you injure someone or cause damage while mowing they can sue you and the homeowner both.
  5. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    The best answer you will get is by calling your county clerk and asking them that question as they will be able to give you detailed information concerning specifics at your location.

    For example, here in Virginia insurance is not required for grass cutting (but for tree work and contracts in excess of $1,000 it usually is), however, operating a business without a license is against the law... Again, this can and does change from one location to the next, so call your county clerk.
  6. TPLawnPro

    TPLawnPro LawnSite Senior Member
    Messages: 424

    You are kidding right? $400 for insurance? Are you referring to general liability insurance? I am trying to find this kind of price for general liability, but can't seem to get it under $2,000.00 a year.

    I absolutely agree with your E-mail response, but I just wish that I could find affordable insurance premiums that are even remotely comparable to what many of the LS members have stated that they are paying. I realize that you may not be paying $400 a year, or perhaps you might be.

    I am only a one-man operation. I am in fact on a mission, seeking to get general liability insurance, as well as insurance coverage to protect my trailer and the equipment inside, from theft.

    Could I going about all of this the wrong way?

  7. Poncho25

    Poncho25 LawnSite Senior Member
    Messages: 369

    Basically what everyone else stated, but to sum it all up if your a little bus, This is to prevent additional headaches! This also is just the right way to start any type of business, do it legit the 1st time to avoid the BS Drama.
  8. Shawnhines

    Shawnhines LawnSite Member
    Messages: 76

    Well, I guess I got what I ask for thanks. I am also looking at what I need to do to keep all my books legal... FOr taxes... Is it better to go to the bank and get a loan for all this or should I buy pieces of equipment piece by piece???
  9. sheshovel

    sheshovel LawnSite Fanatic
    Messages: 5,112

    Regardless if insurance is required or not it is a necessary business expense to protect yourself and your equipment. If you own a home and seriously injure someone you can kiss your house goodby because liability lawsuits will take everything you have.
    You need a business license to conduct business legally in your county. Even hot-dog vendors need one.
  10. Shawnhines

    Shawnhines LawnSite Member
    Messages: 76

    Well Thank you for everyone that has given info, The next question I have is where do I go to get a License and what does LLC mean???

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