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Insurance surprise

Discussion in 'Commercial Snow Removal' started by Mick, Nov 23, 2001.

  1. Mick

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

    Got my Contractor's policy renewal the other day. Sent payment so all is well. Not quite. Got policy today and all the Terms, Limits of Liability and Code Numbers are the same as the old policy. When I look at the Classification (type of business) it says Snow Removal (same as last year) with one major difference. This year behind "Snow Removal" in parenthesis is "(Residential Only)". Check the old policy. Not there. Try to call insurance agent. Closed for Thanksgiving holiday weekend. Now I'm holding my breath for Monday to see what's happened. No accidents or marks against the license. I'm hoping that: 1)it shouldn't be there or 2) a little more money will make it go away. Considering I'm trying to concentrate on businesses and schools, this could be an interesting situation.

    Anybody else ever have something like that?
     
  2. Kent Lawns

    Kent Lawns PlowSite.com Veteran
    Messages: 315

    More than likely it's the underwriter.

    You're in a group (most all of us are) that they monitor for losses AS A GROUP. Or as a risk. They probably had too many claims in your group with that insurance company and are trying to limit their risk.

    The most realistic might be plan 2 (More $ to make it go away)
     
  3. gene gls

    gene gls PlowSite.com Veteran
    Messages: 481

    In Massachusetts there are 3 types of coverage for plowing. I switched agents last year and found out that I wasn't covered for half the work I performed. Every one needs to sit down with thier agents and see what thier insurance covers.

    Gene
     
  4. Mick

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

    Thanks, guys. Maybe not being fully covered is why my insurance seemed low when we compared rates.
     
  5. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    I'll be REAL interested in how this pans out Mick.....
    Please keep us posted.
     
  6. bfraze99

    bfraze99 Junior Member
    Messages: 5

    Insurance co...

    You know insurance co's are really ripping everyone off..... I have a 1 million dollar contractors policy for my painting and drywall biz... wanted to add on my plowing insurance... well they said sure no problem... wont even increase you policy cost... i said wow great add it on and send me the new policy... well i get it and it is for snow removal using anything but my TRUCK!! shesh... So i call them us oh yes you can use a loader a bobcat whatever just not your truck.... now i have to find another insurance co. for my entire biz... shesh... you know insurance co. are a leagalized rackett.... well good luck with your problem...

    Brandon
     
  7. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    I was told this week that I would not be re-written on my existing General Liability policy. The companies are "tightening up their guidelines" and I no longer qualify for the policy I had. My agent searched for a week and a half before finding a suitable replacement, which is $1000.00 per year more.

    Now I'm up to $2500.00/ year for a $1 mil/2mil policy, snow removal only, with only two employees, and a half dozen subs, (who also need their own policies).
     
    Last edited: Nov 24, 2001
  8. Mick

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

    you guys are turning my hair grey(er). I think I'll hold onto "It was all a mistake, we'll take that clause off right away, sir."
     
  9. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    I wouldn't admit that . I think there is a surcharge for grey hair.
     
  10. Filthaut

    Filthaut Junior Member
    Messages: 6

    You may want to check with an insurance agent that specializes in landscape & snow removal companies. I know when we started out we just went to a local agent that had NO IDEA what type to coverage we needed for our line of work. We recently swithed to an agent that primarily writes polices for landscape/lawn maintenance/snow removal and wow, what a difference. Added coverage AND saved money! A good agent should ask you what type of services you do and be able to tell you what type of coverage you need. Check with your local landscapers association to see if the they can recommend someone for you.
    Good Luck... and I am double checking my policy right now!!!

    Kim Filthaut
    Bluegrass Lawn Care, LLC
     
  11. Mick

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

    Ok, got an answer. Just not the one I'd hoped for. Basically, I've been (unintentionally) lying all year about being fully insured. When I got set up last year, I told the insurance agent I only had a few driveways, but was going to try for more. When I got the policy, it didn't specify so I didn't even think about; just figured I was good to go. Put "fully insured" "commercial" on my signs and advertisements. Submitted my policy with commercial bids. Now I find out she'd put it in for a code corresponding to - Snow Removal (Residential Only). She explained to me what we all know, that the insurance companies want to reduce their exposure to risk and that's one way to do that. It doesn't matter what's in the classification - it's the code the ins co will go by to figure if you're covered for a particular claim. In this case the code # for residential only is: 99303. She says they will terminate this policy and write a whole new policy - increase about $300 - $400/yr. I think this experience should cause both single operators and those who use sub-contractors to look closely at ins policies. Your sub may have a policy that says "Snow Removal" but unless it's got the right code, they are not covered for anything other than residential. Here, at least, snow policies are written in one of two ways: "Residential Only" or left blank meaning any snow removal operations. So, even going by that, I would have said I was fully covered - and been wrong.

    She still hasn't heard back from the Underwriter about getting a new policy which is worrisome. She said she has never failed to get a policy for snow plowing written yet, though.

    On another note, I asked about businesses who hire un- or under-insured snow plow operator's. This would also apply to those who hire subs. If the business person hires someone like that, then the business owner (or general contractor) would be found "negligent" for not checking the policy. Their General Liability would likely not pay off a claim. In the case of a business that rents or leases space, the property owner would be held ultimately responsible. The snow plow operator would actually get off the easiest, since whoever is suing would go after the most money and snow plow operator are not usually the ones with the most.

    Also, I found out that Fire Roads are not covered under a "Residential Only" policy. A Fire Road is a privately owned road that several residents of that area will use to get to a main road. The driveways themselves off those Fire Roads would be "Residential". I wanted to find out what determined "Residential" or "Public Road". Two or more driveways onto a common drive? Not neccessarily. The only way to find out is when the insurance company makes a detemination for a claim. Seriously, that's what she said.

    Sorry for being so long.

    Insurance - we must love it since we spend so much on it.
     
    Last edited: Nov 26, 2001
  12. landscaper3

    landscaper3 Senior Member
    Messages: 309

    Mick sent you a email sorry called you marc! Take a look at the email!
     
  13. 75

    75 PlowSite.com Addict
    Messages: 1,382

    Thanks for keeping us posted Mick. Fingers crossed, that means the $$$ figure I'm looking at (about $2400/yr) may be a bit more "in-line" with reality - even taking into account it's Cdn vs US dollars it seemed high compared to what some of you were paying. Now I'm not so sure........................
     
  14. landscaper3

    landscaper3 Senior Member
    Messages: 309

    Our insurance rates we most likely to increase up to 15% by next summer do to the Sept 11th act. This comes directly from our insurance carrier that insures 5 of our trucks, shop and all the landscape equipment. So most peoples labor rates will probley have to increase to make up the raise of our rates. So dont get caught with your pants down start prepairing for increases like these so instead of 3% increase rates we do every year we will have to increase it to ajust the inflation rates.
     
  15. diginahole

    diginahole Member
    Messages: 63

    Also, be aware commerecial insurance won't cover you for public roadways or airports (i.e. hospital helecopter pads).
     
  16. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    Mick's going to be an insurance expert soon.....

    Our Insurance Carrier audits our records and Certificates each year. Spends two days in our office each spring. We're glad he does as he assists us in avoiding the things Mick has described regarding subs Certificates of Insurance and their coverages.

    If you work with the Insurance company, they will work for you when the time comes. SOOOO many in's and out's.....
     
  17. Mick

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

    diginahole - not to dispute you and it may be due to different insurance rules or ins company policies, but she said with the other policy it would cover any type of snow removal.
     
  18. diginahole

    diginahole Member
    Messages: 63

    Mick- your new policy may well cover you for all types of plowing but if you are not engaged in all types of plowing you may be paying too much. I know I pay a significant surcharge to plow snow on municipal roadways. I think if we all follow your lead and keep our brokers informed of our activities, we can and should expect they will keep us adequately but not overly covered. Filthaut mentioned brokers who specialize in green industry insurance, I recently switched to just such a broker and let me tell you this guy knows snow insurance. I certainly don't know much about insurance and am very glad to have an industry expert on my side.
     
  19. Mick

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

    I second (or third) getting a "green industry" agent. My policy is for Landscaping/Lawncare and Snowplowing. This allow the policy to incorporate the lower "green" rate and the "snowplow" rate (which is double the green rate). (ie $300 for 1/2 yr + $600 for 1/2 yr = $900/yr). Business is Snowplowing only - $1200/yr.
     
  20. Mick

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

    Ok, it's been a very trying few days. For two days now, I have been without any type of commercial liability. Many phone calls from me to agent, agent to underwriter and back to me. Basically, the underwriter was not wanting to insure for any "high traffic area". As I'd noted before, at one point they were not wanting to insure for anything other than a private drive (residential). Then they ok'd "Light Commercial", but balked at a school and a post office. Wouldn't even discuss an apartment building. Then there was a period where the agent thought they were going to cancel the policy all together. Then all of a sudden at 4:00 this afternoon, he called and said I was all set. For any type place. What I need to do is send in any bid I get and they'll give me a bond on a case-by-case basis. No problem with the school, post office, stores, malls or anything in the area I'm in. Kent Lawns had it right about the "grouping". The problem was that this company in CT was considering a "mall" in Maine which consists of 4 very small businesses and covers about 2 acres the same as a mall in CT. School in rural Maine the same as a school there. Also, I suspect fewer lawsuits here. The best part - no increase in premium. The agent said that for the area I'm in I'll be ok, I just need to expect an increase when I start doing something like the Maine Mall (in Portland and covers maybe 50 acres). Also, like Diginahole said, I can't go after a hospital or airport. No worries there, either. None in my area.

    I was pretty worried there for a couple of days. After all the money I spent over the past few months ago for another truck and sander, I wasn't likely to recoup from residentials only. My wife and I had already figured we'd just bite the bullet for the insurance, whatever it did. Then when they wouldn't write a commercial policy for any price, there was a problem.

    Now I need some snow. That "freezing rain" we got yesterday didn't help at all.