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Thinking about going to becoming a sub-contractor this year....

Discussion in 'Business Fundamentals' started by mkwl, Sep 28, 2011.

  1. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    Hey guys-

    I've been plowing the last couple seasons, doing driveways for my lawn clients, with a plowing rider on my regular GL vehicle policy. Now, that price has been steadily increasing for the past few years, and this year gas gone sky high (I haven't had any accidents- my agent said it's due to all the lawsuits we see in the snow/ice industry in NJ).... I'm looking at dropping over $4k into insurance alone- JUST FOR PLOWING! :eek:

    So, with that figure pretty much cutting out most of my profitable money for the winter, it got me thinking- should I not be just working for someone else as a sub?

    I have a few questions....
    1) What insurance should a "sub" be required to carry? Will a regular auto policy (non-commercial) do the trick? Wouldn't I be covered under the company's GL policy since I'd be an employee of theirs?

    2) What kind of pay should I expect per hour? This is my 5th year plowing with my pickups- extensive experience plowing drives and some private roads. I'm in Northeast, NJ (Bergen County). I'd probably be plowing in my Dmax (see sig).

    3) What should I be looking for in a contract with a GC? Things to avoid?

    Sorry for the long post- just wanted to get opinions/info on being a sub.

    Thanks!

    Matt
     
  2. Spucel

    Spucel Senior Member
    Messages: 413

    As a sub I have to have my own commercial vehicle and general liability policy of 1Mil/2Mil. If the rates are high, start shopping around.
     
  3. plowwithdodge

    plowwithdodge Junior Member
    Messages: 27

    Insurance

    Scott and anyone else who can help,

    can someone help with pricing for their General Liability Insurance? I have been subbing and am trying to start an llc. The company that I have been subbing for said I am covered under their general liability, but I don't trust anyone in NJ. Any suggestions or help with companies is greatly appreciated.
     
  4. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    Are you an LLC? Reason I ask- in NJ you need to have a Fed ID # (basically you must be an established business) to get a commercial auto policy. It doesn't make too much sense to me that someone being employed by someone else would have to be an established business..... thoughts?
     
  5. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    Did you have a commercial auto policy on your truck when u were a sub? Or just a regular auto policy (passenger plates, etc.)?
     
  6. kimber750

    kimber750 PlowSite Veteran
    Messages: 3,611

    My personal auto insurance will not cover anything that happens while I am plowing if I am getting paid to plow. I can plow my personal properties or work for free and my insurance will cover any damage I cause but will bot cover slip and falls. I also will be sub'ing this year and I am waiting on my quotes to come in for a commercial auto policy. Once hear back I will post them.

    Since I am a sub for this company I am not covered under their insurance.
     
  7. plowwithdodge

    plowwithdodge Junior Member
    Messages: 27

    @mkwl

    I did have commercial ins during plowing season and regular insurance for rest of the year as I am not a full time contractor.
     
  8. blk90s13

    blk90s13 PlowSite.com Addict
    Messages: 1,157

    you be fine as long as your regular insurance company does not know about it, I dont see any sense in having to carry your own plowing insurance if you sub for someone else !


    I think the pay range in NJ is from $70-$90 per hour for a pickup ?
     
  9. Spucel

    Spucel Senior Member
    Messages: 413

    I just started a corporation but I didn't need the info to start the policy. My general liability is around $650.00 a year and my commercial is maybe $1600.00 a year. I am only on the commercial for plowing months. You have to remember with insurance, it's very particular with the specific person. I cant say that my insurance should be the same as yours if I live in a city of 140,000 and you live in a city of 12. Age, previous tickets & accidents, driving distance, your market you are in, and the number of policies all factor in. I have 5 policies with them so I get a discount for that. Don't feel like you need to stay with 1 insurance guy though. See what's out in your area.

    I would always have my own insurance instead of depending on someone else. Say you are plowing for me and I told you I will carry the insurance in a verbal agreement...times get tough and I have to cancel my insurance but I dont tell you. We are plowing the nursing home and a fossil falls outside and smashes her hip. You plowed it, there's a good chance you will be named in the lawsuit and that verbal agreement is worth nothing in the courts.

    I didn't mean to write a book about insurance but I commonly see guys get mad because a 21 year olds insurance is higher than the 45 year olds. Just wanted to give you some stuff to think about.
     
  10. goel

    goel PlowSite.com Addict
    Messages: 1,079

    Really blk90s13???

    You will be ok if nobody knows about it.

    FOOLISH statement.
     
  11. Spucel

    Spucel Senior Member
    Messages: 413

    This is one area you do not cut corners in! If you need to shop around or throw a little extra cash towards insurance then do it. Trying to save $200.00 now by hiding it is just plain stupid....
     
  12. blk90s13

    blk90s13 PlowSite.com Addict
    Messages: 1,157



    but its true

    you will be fine as long as your insurance company does not know you are using the vehicle for commercial work


    Does not mean its right ;)
     
  13. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    Ok thanks- who did you have your insurance through? Did you have to run comm plates in the winter?
     
  14. mkwl

    mkwl 2000 Club Member
    Messages: 2,361


    Sarcasm? Perhaps I worded that wrong- What I meant was "I don't know if I should be required to have my own GL/Comm Auto if I'm a sub (basically an employee of the company).

    Yeah I'd be a little worried though if something happened- because then they'd find out in a hurry lol :eek:
     
  15. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    Commentary much appreciated sir! :salute:

    I would never plow for someone on a "verbal" agreement- I'd have to have everything (especially insurance, liability, etc) spelled out in a contract that I'd have a copy of. I was just wondering if GC's typically "cover" their subs on their own policies, or if the subs themeselves need to carry a COMM/GL policy (to the tune of $4K).

    What I'm trying to reduce is my upfront costs- being $4K in the hole with no promise of making that back isn't too appealing to me this year, with student loans, etc to pay off. So my rationale was, if I can plow for someone else with my regular auto policy, I would eliminate the need for that additional $4K or so upfront.... and still make $$$$ plowing as a sub.

    Maybe I'm just dreaming..... lol :laughing:
     
  16. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    I'm all for covering my arse- my concern is- if everyone around me is going to quote me $4K- I could be $4k in the hole and be workign most of the winter for free..... :eek:
     
  17. Spucel

    Spucel Senior Member
    Messages: 413

    I got a quote for 5K and I told him to play in traffic. Have you shopped around? Don't take 1 price and settle!! I'm looking for a salter, called every western dealer within 50 miles, found one 20 mins from work for $90 cheaper than the other guy
     
  18. Spucel

    Spucel Senior Member
    Messages: 413

    Find a guy in your area that can recommend you to someone. Call $20 different companies and I bet you can find one cheaper than 4K....if I'm wrong I owe you a case of beer
     
  19. plowwithdodge

    plowwithdodge Junior Member
    Messages: 27

    Insurance

    I run my commercial plates all year, but only had/have comm ins through GEICO affiliate last year during snow season expired April 15th. Went back to personal auto as truck is not used for commercial use except plowing. Did not have chance to shop around and money was dangled in front of me. This year I want to be prepared and cover my a$$...

    Have you had any luck with quotes/rates for general liability for commercial plowing? I have no employees, but still feel like I am not covered. Thinking of acquiring a LLC for further protection as well!!!
     
  20. blk90s13

    blk90s13 PlowSite.com Addict
    Messages: 1,157

    Yes it was sarcasm !


    you got quoted $4k for plowing ? or that's just a number you came up with ? that is expensive