I'm doing some dozer work for other farmers (small jobs like fence line clearing & waterway cleaning). How much do I need to worry about liability? What insurance should I have to cover a small owner operator like me doing occasional work?
That may be best offered to a insurer as to a question. I do no contract work with my machine as I cannot afford any form of contractors liability, not even as a favor to neighbors as this can be considered as business not personal use.
Barter, at most, for us. Liability insurance is just too high for any type of contract work. Also with farm plates we are not allowed to haul anything "for hire". In addition we have found that nice guys finish last so even favors are avoided except to only the most trusted folks. People are sue happy around here. There is also the tax question of the income - is it custom work or a seperate business? Best to talk to your insurance agent and tax man.
I'm not running farm plates on the truck...."regular" registration so I'm good anywhere in the state. Liability ins on the truck is inexpensive if it's low miles and not for hire. Truck registration wasn't too bad because, in Iowa at least, when hauling "special mobile equipment"....(tractors, construction equip, etc) you only have to license it for weight of truck & trailer....not gross weight. That saved me $1000 on registration. Not sure if it matters if it's considered custom work or separate business.....all done under my personal taxes. I was more interested in some type of liability ins. while dozing on someone else's property. For example, if I should damage something, someone climbs on my dozer,falls off and gets hurt, or if I hit a buried utility that wasn't marked or they forgot to tell me about. I'm guessing a lot of small time operators like me don't bother with insurance, but I hate to risk my farm on it. Just curious what others have done to cover themselves.
whatever you do make sure you always call for utility locate and wait the two working days to dig. sounds like you are getting some work, liability ins. might be a good idea. I do know contractors that never have carried it.
That's the thing. You can take the risk, but there is always what if. Property damage, injury, utilities, environmental, and my favorite, " Yes, that is all my property" only to find out you're way over the line. We did a little job for a woman, she was the sweetest old lady, home made doughnuts and coffee at break time, lemonade at noon. One of the boys picked up an old shovel leaning on the barn. The handle fell apart, so we left her a brand new one. She called the office, sweet as pie. Lawyer called a week later shovel was her father's, only thing she had left of his. Could have left her the grader and it would have been cheaper.
get enough insurance in the amount of what all your assets are...thats a minimum to start at...
I tried doing what you are talking about. Cheapest contractor insurance I could find for digging in the ground was about 6k per year which would be about break even for the work I would consider doing. You can find landscaper insurance a lot cheaper but you are not allowed to dig deeper than 4" in the ground with the companies I shopped with. My farm insurance covered me if the work was in support of my operation but not work for others. If you have nothing to lose, then go for it without insurance. It was not worth it to me for the little amount of money involved. I had my lawyer draft a release of liability for any "volunteer" work I do for family and the few neighbors I help. I even made my own mother sign one when I graded her lot for a new house she wanted.
It is your risk to take or not. I have had several businesses that required liability insurance. First, when we retail farmed we carried a policy that covered the people who came here. Needed it twice. One was a slip and fall in a field in the winter picking a christmas tree. She had high heels on. Still, our policy paid. Other, idiot broke his car window, was covered. I had a retail store for 10 years my agent advised me to buy 'no fault' insurance. We called it oops insurance. For example if you smashed you finger in your car door my insurance covered it. Was good P.R. to keep the lawyers away. We did custom tree spade work for years. Became too much of a risk. Being on the road, property line disputes and utilities. Lastly I managed a multi-million dollar service firm doing work in very upscale places. I was in charge of insurance. We had millions on our polices. Covered everything. We took no risks but paid 60k a year in premium. As others have said, it is the what if. Recently, a friend doing commercial excavating had utilities marked by CBYD and still hit a gas line. They marked it in the wrong place. Guess who was liable? So how much are you willing to risk for the work?
I'm going to tell it like it is - if you're going to be in business you need to be in business and that includes being properly insured. If you want to do side jobs and pick up the extra cash then it's a risk vs reward question. How much risk are you willing to accept for the revenue from the jobs? Insurance policies and cost for earthwork vary widely. Go see a local agent and see what the costs are for what you want to do.
I carry 500k and its about 500$ a year. I would not feel comfortable without it. In the case of a higher limits I can add to my policy to cover what's required. For me to do a half mill in damage is possible but unlikely. Fibers are the ones that will get you. I have had mismarked utilities and cut lines before, I was not held liable for a wrongly marked line.
Am having issue trying to wrap my head around that. In all the states I have lived and worked(11) if you cross a scale or get tagged by portables you better have plates that cover the weight in total of the truck, trailer, load. Never heard of exemption of load as to weight plates, are you certain they did not mean 'Vehicle Gross Weight RATING'?
It seems like the purpose of insurance is to keep the little guy out of business and make lawyers and professional victims a lot of money.
DMiller, I had two different Dot officers tell me I could register it for weight of truck & trailer only. Apparently it's an Iowa only rule but it only applies for hauling your own equipment and can't be hauling for hire. Quoted from Iowa Truck Information Guide: Special mobile equipment (SME) – private carriers Owned or leased SME may be excluded from the gross registration weight when transported on trucks or truck-tractor/semitrailers of a private carrier. The truck or truck-tractor registration–at minimum–must register for the weight of the combination (truck or truck-tractor, trailer or semitrailer, and any nonSME load). This exception applies to vehicles within legal dimensions and also those exceeding legal dimensions operated with an oversize permit. The SME exception does not apply outside the state of Iowa. For-hire carriers may not claim the SME exception and must register for combined gross weight. Example: A construction company is transporting their bulldozer with a truck-tractor/semitrailer and has a gross weight of 80,000 pounds. If the SME bulldozer weighs 38,000 pounds, this weight may be subtracted from the 80,000 pound gross weight for determining the minimum required registration weight (80,000 – 38,000 = 42,000). The truck-tractor must have at least 42,000 pounds of registration weight, including tolerance. A 20-ton (40,000 pounds) license with 5 percent tolerance (2,000 pounds) will meet the required 42,000 pound registration weight (40,000 x 5% = 2,000 + 40,000 = 42,000). Special mobile equipment (SME) – general information SME can be hauled, towed or self-propelled equipment or vehicles that are not designed or used primarily on highways for the transportation of persons or property. SME is operated or moved over the highways incidental to its primary off-road purpose. SME is exempt from registration. SME plates and certificates are no longer issued and not required for a vehicle to receive SME exceptions. Examples of SME include bulldozers, end loaders, cranes, and some truckmounted vehicles. The Iowa DOT’s Office of Vehicle and Motor Carrier Services has a list of equipment that qualifies as SME. Contact that office at 515-237-3264 if you have questions regarding SMEs. SME operated in interstate commerce are subject to the same regulations as any commercial vehicle. Some intrastate exceptions exist for SME. Contact the Iowa DOT’s Office of Motor Vehicle Enforcement at 515-237-3305 for more information. Drivers of truck-mounted, self-propelled SME are subject to commercial driver licensing and company-based drug and alcohol testing, as required by state and federal law.
There are probably small jobs that have little or no risk but you are leaving yourself wide open without insurance. Like driving without insurance, you might get by with it but it's not worth the risk.
That drew a Hmmmm. Never seen anything similar save farm use in other states.
Yes that is the way it is. The system is set up in a way that everyone gets their cheese. The cost of insurance is figured into my pricing. I can't change the system, only learn to play by it's rules and charge accordingly and make a buck or two along the way.
Sometimes it works like that . Then again if a little guy is just starting out & has no assets . Why worry about the insurance unless the customer demands it ?
In MN the DOT is writing tickets for "uninsured" if you get caught overweight and you are insured only for the vehicle gross weight. Most of the log trucks here are now carrying insurance coverage over and beyond there gross license weight. I mentioned this it to a CA friend whom had just got a new 9 axle rig. He contacted his insurance carrier found he was not covered on his construction company's fleet insurance for the extra weight. He ended up raising his limit. To be insured for empty truck weigh may be legal but sounds like a real liability issue to me also.
My biggest fear would be injuries and being sued. Car insurance liability minimum is 1 million bucks. I always went with the minimum. My wife's 18 year old son took my Mustang GT and put it over an embankment, just inches away from 80 feet of water. He was fine, but he had a 16 and a 17 year old girls with him. They all walked away, but a few weeks later my insurance information me that the 16 year old is showing signs of PTSD. My million dollar minimum did not cover it, and 4 years later I or should I say her son is still paying for it. So you never know.
I had tried to start a sideline mechanic business years ago. Did alright for a few years scraping a few extra hundred on odd jobs so considered opening my own shop. As all can see I did not, could not afford the startup costs; EPA write-ups, certifications of facility, tax estimate prepays, insurance for starters. Then had base utilities, shop costs, extra tooling expenses where I just threw in the towel before stepping into the ring. Was told by a few older hands that had established business that they got lucky getting their start twenty to forty years prior with some inheriting family shops that were grandfathered by ownership. Costs back then were next to nothing where dealers and major suppliers were squalling for vendors to shop their wares with all sorts of cuts and kick backs, not so today.
Yikes...how can you plan for something like that?......That's what I'm mostly concerned about ....getting someone hurt. You never know when a kid might come out to watch you work, you don't see them, and they get a little too close. Depending what I hear from my insurance company next week, this may put an end to my desire to do custom work.
D6c10K , check with your currant farm policy holder . They may have a provision for doing work off your farm . Farm Bureau insurance used to have that , may still . I never used them for excavating but remember it was not that expensive to add it to the existing policy . If you mentioned crane , boom , or winch they slammed the phone down . LOL !
Well in short, you can't. You plan the best you can and get the insurance to cover what you will do, it's no different than regular life, as cutting edge's post demonstrates. There is risk with owning a business, getting married, having children, driving your car to the grocery store and with everything you do every day. You want to minimize risk as best you can and roll the dice - being scared of what could happen shouldn't keep you from giving it a shot. I don't go to Web MD anymore, my finger can be hurting and within 15 mins of reading, I'm going to die in 6 months.. There are many ways to minimize your risk or exposure in business. First and foremost have the insurance coverage you need for the jobs you will be doing. At the end of the work day look around your job site and safe up any hazards you see. For me that means any open manholes are covered with plywood or stakes with caution tape. If you have a cut bank over 2' of depth either caution tape it or park your equipment around it with tape in between to keep someone from driving or walking off the edge. That works OK for a small site but a challenge for a larger site. If you can block entry to the job site from vehicles and pedestrians that is the best option but rarely possible. A couple of cheap plastic signs warning "Danger construction area do not enter" also goes a long way to reduce risk. These precautions are not only to protect the public but also yourself. Showing an effort to protect your job site from hazards to the public is helpful in the unfortunate event someone gets hurt on your job site or a "slip and fall" professional targets your site. If one only contemplates how things could go wrong then there is no time to contemplate on how things can go right.
Since I am new to dozer ownership I asked my agent the same thing. I have a couple neighbors that think its great that I bought a dozer and they have a few small jobs they want me to do. I haven't told them yes or no at this point but I asked the agent what the coverage was. They told me as long as I was doing the good neighborly deed and not doing it as a full time venue that I was fine. They said if I was to do something and need the insurance that my farm policy would cover it at that point. The one thing that my agent did stress is that you don't let the neighbor operate the machine at all even if it is a short "hey do you mind if I give it a try?" The answer is always yes I mind because I have no insurance once you step on this thing to run it. The exact words were that "your @$$ best be in the operator's seat at all times or don't call me if something goes wrong when if someone else is running it." My agent and I get along great... there is not one bit of sugarcoating on anything. It is told exactly how it is.
One other almost forgotten note is the DNR group of your state, the Departments of Natural Resources also generally control runoff issues as mud or ditch damage from excess materials slippage. Check on if you are required to use 'Mud Fencing' around roads, road ditches, neighboring homesites or running streams as many states as MO requires the excavating 'contractor' to control any and all materials in an excavation.
That's cool crharms ! Yeah , don't be afraid of helping neighbors with tasks . Might be something simple like grading the driveway or after a tornado go's though and need help moving trees off the road . Take care of neighbors and they will take care of you . They are the first people that will show up & help in any situation good or bad and won't ask why ? Insurance agents are for after the dust settles . Take care of the neighbors first bro .
Talked to my insurance guy and found out a little info. If you just do $1000 or less for hire work / year, my existing farm policy would cover me.....but one job will likely go past that amount. At that point you're into what they're calling an "Ag Max" policy that covers for-hire work. They move my existing umbrella liability over to the Ag Max policy, increase the liability coverage on all of my vehicles and supposedly I'm good to go. The net increase in my overall insurance should be in the $400-500 range. They're going to get back to me with a specific quote in a few days. I do need to clarify if it would cover me if I was working on a project that wasn't "farm" related.....ie. doing work on a rural residential acreage. I have no intention of doing any work inside a city limit....way to many hazards in that.
ask your agent to put that in writing, so when you have a claim you will have proof of your conversation..I dont care how good a friends you are , that will change if a large claim comes in against you..