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Another insurance thread w/ summary

Discussion in 'Commercial Snow Removal' started by dave-man, Sep 26, 2002.

  1. dave-man

    dave-man Junior Member
    Messages: 19

    First, I started out by searching. <grin>

    I've been plowing for about three years doing residential driveways for my home, and my immediate neighbors. I've even done the driveway for the guy across the street who plows for the state, so his wife can get to work while he is still out! No money changes hands (although beer has mysteriously shown up on my doorstep from time to time).

    I'm trying to make a small business out of this hobby. Exploring insurance options (comm'l vehicle and CGL) with USAA, my current insurance company, was not very encouraging. They can write me through USAA General Agency for comm'l vehicle ('00 F250SD) taking my premium from about $800 for the truck to around $1600-2000. They won't write CGL. So I am out shopping.

    Buy if insurance is an extra $1000 for vehicle, and $1000 (guess) for CGL, and it snows three times here in the DC area (more than the last two years added together) I have to clear $700 per storm after variable costs (gas, tires, oil, etc) before I start paying myself.

    I just don't see it without seasonal commercial contracts. Anyone else? Am I missing something here?

    A consolidated summary from a search on "insurance company" with cutting and pasting, some consolidation of multiple posts by a single person, but no editing:

    thelawnguy

    Most GL policies go through The Hartford then come back to you with a commission tacked on and a different name on the cover. Maybe try them direct.

    SnoJob67

    Try finding an agent that sells Westfield.

    John Allin

    Acordia is the 6th largest broker in the USA.
    We just started using them and found them to be uniquely informed on the needs of the green and white industries.

    Acordia is now a part of the Wells Fargo group of financial companies

    Mick

    I'm probably on the low end of the scale and I think my GL is around $1200/yr and CV is around $800 for a 1/2t '90 Dodge and 1 ton '96 Chevy.

    I should have specified that GL figure is for $300,000 - which is really the minimum for anywhere. 2M will be substantially more. For most metropolitan areas, 1M would be enough for most small businesses with one or two trucks.

    MNPlow

    In terms of insurance, I just about fell off my chair when I got a few quotes back for commercial auto to cover plowing. Add to the fact that I lack experience and you end up paying more for one truck than you do for your two personal vehicles. Perhaps I am a little naive regarding costs in this area. Anyway, does $1450 per year sound out of line?

    75

    Michael (MNPlow) although I'm from Canada, therefore it won't be a direct comparison, your insurance quote doesn't sound too bad to me: I'm looking at $2400 for the year, 2 mil coverage for both commercial liability and the auto policy. My truck's a lot older than yours too.

    OBRYANMAINT

    mine is auto owners also but only liability for business


    my commercial auto is progressive and it seems to be the cheapest commercial policy i have found

    flakesmeangreen

    have my comm auto through allstate and liability through zurich...allstate wouldn't write me a liability b/c of plowing...

    my comm auto runs abour $870/yr and $400 liability/yr. all residential plowing but policy covers up to 10% comm, if i get more then that my rate may go up slightly they tell me...

    SCL

    My comm.auto is through State Farm and they cover any snow plow mishaps. Got to try it last year and they were great. Commercial biz liability through Pekin.

    State Farm full truck coverage $250 deductible runs about $750 a year. Biz liability $1 mil coverage around $400 a year.

    JCurtis

    Been shopping around lately, best price I could find so far for one Truck (1/2 ton) was:

    $1,500 for Comm. Auto ( $1,000,000 Liability)

    $ 700 for CGL ($1,000,000 Liability) for 6 months (snowplowing) only

    thelawnguy

    Im in a similar sized urban area (Hartford) and pay considerably less for same coverage. Try Farm Family Insurance (860-875-3333) only caveat is you must remain a Farm Bureau member while the policy is in force.

    from what my agent has told me, my commercial auto policy covers snowplow on the truck and if it hits something in transit. Your contractors liability covers damages made by the plow while plowing. 30ish married male with a couple points on my license in an urban area runs me 900 per year incl comp and collision for the truck, 172 per year for the contractors liability is additional.

    Jay ALC

    Wrapped up so that my truck and trailer are covered this would cost $4329.00 a year(BTW I'm 17, with no tickets, record or anything). The 4329.00 would just be for the auto and trailer with the auto having 1 million liability($500 deductable). Then for all my equipment and for 1 million in general liability he said $851 per year($100 deductable).

    ...

    They still insure me for everything including each piece of equip for less than $1700.00 that is with the coverage to do even the largest accounts at 2 million in general liability and on truck liability. The company is Allied Insurance if any of you are curious to know.

    plowking35

    All three of my trucks have comp and colision, and that policy is about 2K a year. My general liability is around 800.00 a yr.
     
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Not being a smart aleck, but basically what your "missing" is that you are going from doing this as a hobby to a business. As a hobby, you could just "fool around with it", doing it for beer or fun etc. Now you need to get serious, provide serious service, figure expenses (long term and ongoing costs), probably get contracts, set fee schedules etc. You might still be able to make a profit doing only drives but you're going to be a lot busier. Yes, insurance is expensive, but the first time you accept any money you have just held yourself out as a professional and opened yourself to liability. Technically, I think that beer could be considered "compensation" if they can show it was expected (called "quid pro quo").
     
  3. dave-man

    dave-man Junior Member
    Messages: 19

    My issue isn't with the cost of insurance. What has surprised me is that one can't "try this out." There doesn't seem to be a way--in this light snow market--to do one or two commercial lots and a dozen or so driveways. I'm still running numbers, but even if it snows (no guarantee around here!) I really need a pretty large customer base to even cover costs. I originally thought that I might be able to cover costs with a couple of CVS's (assuming a winning proposal to SMG) and the driveways would be gravy. Doesn't quite look that way as I run numbers.
     
  4. willtill

    willtill Junior Member
    Messages: 6

    Well, could I ask another "newbie" question?

    I know that you need to carry commercial vehicle insurance for your truck/plow setup. However, I wasn't aware of the need to carry commercial gross liability. Can you/has anyone tried to extend their homeowners insurance to cover the commercial gross liability requirement? I copied the following from http://www.bcentral.com/articles/insurance/107.asp

    It is possible to add liability insurance as an extension to your homeowners or tenants policy, but this coverage tends to be limited. Even though the premiums for this coverage tend to be lower than most than most commercial policies, the downside is that there are strict eligibility criteria:

    The business must be insured by the owner of the house or from his immediate family.

    Only one business can be run out of the home.

    Gross annual sales cannot exceed $50,000.

    The business activity must be acceptable to the insurer.

    There must be no claims arising out of the business operation for the last three to five years.


    Kindest regards,

    -Will in Maryland
     
  5. HD61CUIN

    HD61CUIN Senior Member
    Messages: 173

    Hmm the contractor I worked for last year, didn't require me to get additional insurance. I was driving his vehicles though so that makes sense. Well when I called him this year and told him I got a plow truck, when asked he said I did not need additonal insurance. So that must mean that I am covered under his business insurance. He only asks for a copy of my Drivers License? I plow a Yellow Freight trucking yard, theres a ton of stuff to hit there!
     
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    HD61CUIN, from what I understand from my insurance agent, that would make you an employee. Especially since he specifically told you that you'd be under his insurance. Any employee driving a vehicle needs to have a license.
     
  7. HD61CUIN

    HD61CUIN Senior Member
    Messages: 173

    Well yes I am an employee, he gives me a regular check with taxes and all. He has my CDL onfile so yes I have a license. It is not too bad having taxes removed, he kicks in a few extra dollars each paycheck to make-up for the tax.
     
  8. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Sorry, willtill, I haven't answered your question sooner. I had actually looked into it when you posted it, just hadn't gotten back. Partly, cause I was digesting all that on that site. I am by no means knowledgeable on insurance matters and you should check this out with your homeowner's insurance agent. I think what you'll find is that snowplowing is not an "acceptable" enterprise for extending homeowners insurance to cover a home-based business. We are in a high-risk business and it shows through our insurance rates. I'm assuming you have learned from looking at past posts why General Liability is needed in addition to Commercial Vehicle insurance.

    If someone has a better answer, I would welcome it.

    Like I said, check it out. You might be pleasantly surprised.
    :drinkup:
     
  9. plowed

    plowed Senior Member
    Messages: 344

    willtill - regarding your comment - It is possible to add liability insurance as an extension to your homeowners or tenants policy, but this coverage tends to be limited.

    My interpretation of this would be if you had clients/customers coming to your home for business meetings, etc. This does not cover your for things such as plowing. The commercial liability is a rider on your homwowners but only covers events such as if you held a business meeting at your home office and on the way into your home your customer slipped and fell. They in turn sue you, and they claim they were there as your customer for a business meeting.

    Hope this helps.

    John
     
  10. Rooster

    Rooster Member
    from Kansas
    Messages: 650

    HD61CUIN,

    Check with your insurance agent, get everything in writing, You insurance agent or the company you have your insurance with, mabye even your bosses insurance company might have a different idea of what insurance coverage you have or will be using.

    To be classified as an employee, check with your accountant.

    Something for employee from IRS:

    Are you told when and where (time and place) to report to work?
    Do you furnish tools for the job?
    Do you furnish materials for the job?
    If help is needed who pays the help?
    Lots of questions, so consult a good accountant.

    And NEVER, NEVER ASSUME anything, get it in writing, remember CYA.

    Rick