I have been wrenching on farmer's older tractors for years and liability insurance hasn't been a concern. I have though recently began performing some repair work for a multinational aluminum plant on their scrap trailer tipper trucks and a Broce broom. I was called about a failed fifth wheel plate and had a new one ordered and paid for when I was called by my friend and contact asking if I had insurance. I feel if I don't acquire a policy, this will work opportunity will be pulled. For those of you independents working for companies requiring liability insurance, what are good source companies, policy types and amounts of coverage? I'm a small timer and this will be the only (so far) need for it so I have the added question of is the cost worth the money I can make form the customer or do I say thanks for the work and move on.
Sorry I can't help but I'd like to know this myself as well.
just call an insurance broker, tell them your business and the amount of work you do, you also want enough insurance to equal all your assets....you also should incorporate with a sub s corporation, its the best of both worlds for liability and tax advantages....also get an accountant to set you up right,,
I thank different insurance companies provide better service in different areas. Service as well as pricing. A good agent can be your best freind. Simular to a good mechanic they are hard to find. You need to know what the companies requirements are. Then decide if the cost justifies the expense. You have no history so your rate will be higher and some will not even insure you. Questions maybe asked like do you repair 5th wheels, steering boxes, install hitches and or do frame work. They are looking for high risk customers and will increase the rate or decline to insure you. Insurance should be used as a last option. With no claims and some history your rates should come down and you can do some more shopping. Some companies require to be listed as a loss payee on your policy. That is no problem you just have to ask your good agent for that.
It is very cheap to buy..... really really expensive to not have it. A good agent that will explain/ steer you in the right direction. And a second opinoin from legal point of view.
I know rates for my sideline business years ago set me on my heels, I had to stop working side jobs to keep from going broke paying for liability insurance I could barely afford. One car or truck or heavy machine fails due to my work or can be somehow related to anything I had done to it and the hard earned house, cars, tools, toys are gone.
This is one of the main reasons I never even thought about going the "sub-contractor route" when I retired back in 2015. Many people said that is what I should have done, retire from company then go right back to work for the same outfit as a sub. charging twice the hourly rate I had been getting. I have lots of respect for anyone who can manage to run a business doing this kind of work and turn a profit while keeping their sanity! Too many people don't understand why a repair man would be asking as much as $100.00 an hour or what ever is the going rate in the area. They think all that money goes in to his pocket at the end of the day. Without really having any idea I would say if he saw 1/4 of that he would be lucky!
For my little garage, I was going to have to add $8/hour just to cover the liability insurance. Was making next to nothing already along with no-pays so said the hell with it.
Where to start... I called my personal vehicle insurer and was referred to a Commercial Insurance broker to which I gave my info and was told up to 8 different agents would replay within a day. Only one called and then I went through person after person in what seemed like going in circles. My line of work didn't fit into their categories. I was finally told to call a local brick and mortar agent as they would have more options available. I did and after several calls with questions to a 12 page additional information packet, the agent called back and asked if I would be working on combines and if I were that would be an upcharge. I do on occasion and happened to have parts ordered for one at the moment. She then listed several machine types which were forbidden, one of which was logging equipment and I was in the middle of a Jaraff sky saw repair. I would also have to post 'Employees Only' signs in my farm shop, means of securing customer machines and keys, and a raft of other requirements. It was aimed more at auto repair shops but I specifically tell customers I don't work on any thing with a license plate. If they saw my service truck with my shop built crane, custom built air compressor with a propane tank for storage under the bed and other "custom" features, I'm sure they would drop me anyway. The agent told me that the base on a policy was going to be $2,500 and would likely be much higher than that. No way for the customer base I have and deal with; local farmers with older machines desperate to avoid stealerships (who I sometimes am referred to by, or fix their screwups), weekend warriors, and hobbyists. If anything goes wrong, its "can you come back and fix it, please!?", not "I'm going to sue". I am nearly 'it' for independent mobile and shop farm equipment repair in my area so its stay on good terms or try to find someone else. Maybe I'm playing the odds, but after over 15 years with no issues, I'll continue on. Regarding the primer for this whole subject, I carried the fifth wheel plate (which turned out to be wrong) to the plant to supervise their employees to install, and in conversation was told that the liability insurance was required only for the hoisting mechanism and hitch but everything else was fine (steering, brakes, etc. ) They have been screwed over by the outfit they've been dealing with as they've been paying through the nose to have the trucks towed to the shop and then forgotten about for weeks. Management is thankful to have someone who is johnny on the spot who can get them going quick in a pinch. My friend and contact was told by his direct super to keep his mouth shut to the yard manager from now on about repairs being done as they are desperate to keep me coming. I can still do truck servicing and repair, and work on their Broce broom, just not the trailer raising gear. I turned over a fifth wheel jaw kit to them which they were going to have a bonded trailer repair service install. For now, I will be very careful about repairs I make and turn down risky work. kshansen; Regarding my business, have you heard of the career choosing you? After my father, who has farmed all his life, retired from ag teaching, locals started bringing tractors to him for repair. He went back to work in maintenance at a local plant and I took the shop over while in college for a BS in Industrial Tech. After 8 years of meager pay and increasingly shi++y conditions at TxDOT and ever increasing moonlight wrenching on the side, I quit under bad circumstances and went home full time. That was a big and frightful choice but I haven't had time to look back and couldn't afford to go back if they asked me. I stay behind at the shop and with service calls, and have had to pare all that back to work a big long term land clearing and earthwork job a repair customer gave me. It can be very stressful at times trying to juggle all the demands. At $60 an hour for wrenching, my wife can stay home with our 3 kids with another on the way and home school them, I can decide, working around my season, when we take a vacation (Silverton this year, no way on TxDOT salary!), and don't have some jerk boss giving me another thankless work order. If customer appreciation had a monetary value, I'd be rich as I have been told by several that if I quit wrenching, they'd have to quit farming. I can also take care of my aging parents and our family farm without having to beg for time off. I am truly blessed with the talent I have and the opportunity to put it to use and profit from it as I have!
I don't know of any dealerships I've worked at or worked for that carried any general liability insurance outside of the vehicles they own and use in the business. I carried professional liability for a few years to go with my appraisal business but was told by an attorney in a conference that it was only making me a target for an ambulance chaser. He told me to incorporate the business and only buy tools and equipment that would get me by. That way if someone happened to win a lawsuit all they would get was the junk I was using. That was an old Toyota pickup with lots and lots of miles and a few fabrication tools that I purchased through the business. The other side of the deal was to inform my customers up front that I guarantee my labor only. I quit buying parts, especially on my dollar and I told the customers up front if I didn't get paid on time to not bother calling back and to expect a lien on any job I found them on. If there was a dispute I was happy to find a way to negotiate through it. Now here is the part that always fries me and the way I was able to work through it. I'd ask a new customer that brought up the warranty crap if when they went to their doctor if he guaranteed that he could fix a cancer, cure a disease, or fix a damaged part of your body back to new? If you were accused of murder and taken to court do you know of any attorney that will guarantee that he will get you acquitted? Would either of them would refund your money if you died or went to jail? So I am pretty good at fixing machines but I don't just work on one type of machine or just one aspect of a machine. Your chances are pretty good that I can do the project quicker and for less money than anyone else you might deal with so knowing that do you still want me to work on your machine. If so here is the agreement for services, once you sign it I'll get right on the project. Only got burned a couple of times on a no pay before I started dealing this way.
I have nothing but admiration for you guys who can make a go of it as private repair services, guess I'm just to much a worrier to have done things that way. Plus for the first 30 years at the quarry I felt pretty good about the company, felt they were treating people fair and not asking too much. Then a new upper and middle management team took over at least this part of the country for the company. I knew we were in for it when one of the first things the head man for the state said was: "I don't know anything about making stone, but I know how to make money!" It wasn't long after he took over the shop that had been doing 90% of the minor and major repairs for all the quarries in the state and even some in other states was phased out and all the people other than myself and one other guy were done away with or stuck in some other job. Like Bill the welder who used to rebuild all the buckets and did the linebore work, he was transferred over to being the guy sitting in the shack running the primary crusher. Another guy also named Bill who was a good general wrench puller was put in haul truck feeding the primary. And to get this back on track talking liability insurance, from what I understand the company requires any sub-contractor to show proof of a minimum $1,000,000.00 liability insurance to work on their property and also show proof of a valid MSHA certificate of safety training. I believe these requirements only apply for someone working on their property. But as there are few things small enough to transport off property for anything short of major repairs that is a problem. Add to it that this upper level boss is one of those guys who if you replaced a brake light bulb on a crane and a week latter one of the lift cylinders for the boom started leaking he would try to blame it on you say "Well you were the last one who worked on it!" I actually had a conversation with one of the local crane dealers who said almost the exact same thing about this guy.
In my area its a early question from potential customers.. do you have insurance. Both liability and work comp. Many general contractors require a copy on file before they will give you a job. This is onsite work only... if you have a shop/ yard. Thay do not even ask about it. I do mostly site work.
Insurance companies have a long history of putting the little guys out of business. Maybe another case of "The end result reveals the original intention".
Ditto S.Cal...W9 for work comp, $2m for general liability. LLC less formally compared S.Corp...General Con LC requires S.Corp, $15K bond. Independents I hire typically have under $100.00 per month general liability costs. Slow~no pay, lien contractors' bonding, on larger projects go after the bonding company with a lien. Bid the job, file 15day preliminary; contractors' are suppose to ask for 15day prelim...
You've always needed it, you just didn't have it and managed to skate by.
I have general contractors liability and products coverage. It costs me $2900.00 a year for 2 mil.
What I took away from the whole attempt was in the type of work I perform, types of equipment I repair, and my work environment, I'm a one off that can't be crammed into their neat little boxes. The policy amount being proposed was for $300K. I was asked by one agent if I would categorize myself as one of 5 options such as General contracting, construction, or remodeling and upon telling her none described me, that was the end of the conversation. The local agent I talked to asked if I worked on several categories including logging, people lifting devices (boom trucks), passenger buses, frame repair and said those were not allowed in the policy she could write. I run forestry equipment and was in the middle of a pole saw repair for a customer so I was already on the no no list! My shop is on our family farm and getting it up to their requirements for a site inspection would be a flat out impossibility. I realize I'm taking a risk but short of building an offsite shop and getting a certified service truck (crane, air compressor, etc), I'll continue skating very carefully. I can also see John C's point about becoming an ambulance chaser's target with a policy.