Do any of you have liability insurance for side jobs? If so how much is it per year to say cover damage by a FEL, Backhoe, bush hog. Do you need to register as a business to get this type of insurance? I have lots of people asking me to do work since I got the tractor but don’t want to get sued if something goes bad.
Side job insurance.
- Thread starter Brick Axelrod
- Start date
BillK01
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BX2360, FEL, LP 1560 back blade, Front mount snow blower, Ferris ISX800 ZTR
Good question! This is in PA but I would imagine it is similar in SC.
First off your home owner insurance will not provide coverage for you as soon as any money changes hands, nor will it cover your equipment while in transit or while making money with it. I assume most folks know this already but it bears repeating for those that are under the impression it will.
I own an insurance agency and have quite a few small landscape / light land grading guys insured that are part time (NOT excavators - they are more difficult to write and more expensive to insure). You do not have to be a corporation or llc - lots of the guys are sole proprietors.
The company I use for these risks generally charges a minimum premium of $475/year for a basic $1,00,000 occurrence/2,000,000 aggregate general liability policy (without XCU coverage - more on that later). That $475 does NOT include equipment coverage. Normally if you add around $15,000 in coverage for equipment it adds about $200.
Now about XCU - a regular unendorsed commercial general liability policy specifically excludes coverage for explosion, collapse and underground hazard (XCU). If you are digging and moving earth you need this coverage. The last $475 policy I wrote would have been $645 with XCU. The guy was only doing some light mowing and opted out of that coverage against my recommendation.
Hope that helps.
First off your home owner insurance will not provide coverage for you as soon as any money changes hands, nor will it cover your equipment while in transit or while making money with it. I assume most folks know this already but it bears repeating for those that are under the impression it will.
I own an insurance agency and have quite a few small landscape / light land grading guys insured that are part time (NOT excavators - they are more difficult to write and more expensive to insure). You do not have to be a corporation or llc - lots of the guys are sole proprietors.
The company I use for these risks generally charges a minimum premium of $475/year for a basic $1,00,000 occurrence/2,000,000 aggregate general liability policy (without XCU coverage - more on that later). That $475 does NOT include equipment coverage. Normally if you add around $15,000 in coverage for equipment it adds about $200.
Now about XCU - a regular unendorsed commercial general liability policy specifically excludes coverage for explosion, collapse and underground hazard (XCU). If you are digging and moving earth you need this coverage. The last $475 policy I wrote would have been $645 with XCU. The guy was only doing some light mowing and opted out of that coverage against my recommendation.
Hope that helps.
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Yes, it is expensive, but wait until you cut a bundle of phone lines.
I trenched with my Ditch Witch R40, and had the coverage Bill addressed from day one. Always called for locates, no exceptions.
About 12 years back I charged $350 to bury one line. The next day I got a call from AT&T telling me I severed lines to 5 homes and repair cost would be $1250.
In this case the locate company got the mapping wrong and it wasn't my fault, but if it, was I had insurance.
Don't dig on other's property without it.
I trenched with my Ditch Witch R40, and had the coverage Bill addressed from day one. Always called for locates, no exceptions.
About 12 years back I charged $350 to bury one line. The next day I got a call from AT&T telling me I severed lines to 5 homes and repair cost would be $1250.
In this case the locate company got the mapping wrong and it wasn't my fault, but if it, was I had insurance.
Don't dig on other's property without it.
dirtydeed
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B2650 BH77, U27-4R2, BX23TLBM, box blade, rear blade, flail mower, Stump Grinder
Bill is spot on.
I had a part time landscaping business for several years. If you're in the right area and do the right services/jobs, it can be very profitable. However, if you're going to do it, then do it the right way. Get the appropriate coverage. "Landscaping Services" should cover you digging to approx 4 feet. Beyond that, excavating services cause the rates to go up sharply.
I'd still recommend setting up an LLC. It will help protect you should you be sued. It would also be very useful for you to write off expenses....including your equipment, fuel, phones, taxes etc. Additionally, here in PA, you have to register with the state as a contractor. I believe clients are not obligated to pay you for work done if you're not registered with the state in PA.
I had a part time landscaping business for several years. If you're in the right area and do the right services/jobs, it can be very profitable. However, if you're going to do it, then do it the right way. Get the appropriate coverage. "Landscaping Services" should cover you digging to approx 4 feet. Beyond that, excavating services cause the rates to go up sharply.
I'd still recommend setting up an LLC. It will help protect you should you be sued. It would also be very useful for you to write off expenses....including your equipment, fuel, phones, taxes etc. Additionally, here in PA, you have to register with the state as a contractor. I believe clients are not obligated to pay you for work done if you're not registered with the state in PA.
Yup. I've seen guys take on side jobs like you're describing and cut lines, pipes, one guy even dug up a grave that was an old cemetery. I had one customer talking about how he was bush hogging for a guy and hit a piece of an old tire, and sent that piece of tire through another guy's house. Insurance would've covered it but he didn't have any, so the homeowner sued him and easily won. IIRC it was about $4000. Guy who was doing the side work admitted that he should've had insurance.
Thing is, if you're insured, you've got to charge a little more to offset that cost of the insurance. BUT...if you can advertise that you're insured, it may draw in more work. Friend of mine bought a brand new L35 in 1995 and went into grave digging as a main job and then side jobs doing plumbing lines, etc. No insurance. I mentioned it to him and he agreed that it'd be a good idea and went ahead & bought a policy. Advertised it too. He was as busy as he could stand to be from then on..and I mean REALLY busy. Paid the tractor off in 13 months.
I even know of a dealer who loaned a dealer-owned "loaner" lawn mower to a customer...as I recall it was a conventional riding mower. The mower had the seat switch bypassed, was that way when the borrower picked it up. Anyway, the borrower cut the yard with it and then got 3 of his buddies rounded up. Mower was started and blades engaged, then the 4 guys picked the mower up by the deck in an attempt to trim the bushes. Yep...lots of cut fingers. Now this was a weird deal for sure, but the 4 guys SUED the dealer for about a hundred grand....and WON; on a technicality (seat switch was bypassed at time of pickup and nobody bothered to tell him). Point being, you never know what you're up against...but if you try to protect yourself as best you can generally speaking you'll be ok.
Thing is, if you're insured, you've got to charge a little more to offset that cost of the insurance. BUT...if you can advertise that you're insured, it may draw in more work. Friend of mine bought a brand new L35 in 1995 and went into grave digging as a main job and then side jobs doing plumbing lines, etc. No insurance. I mentioned it to him and he agreed that it'd be a good idea and went ahead & bought a policy. Advertised it too. He was as busy as he could stand to be from then on..and I mean REALLY busy. Paid the tractor off in 13 months.
I even know of a dealer who loaned a dealer-owned "loaner" lawn mower to a customer...as I recall it was a conventional riding mower. The mower had the seat switch bypassed, was that way when the borrower picked it up. Anyway, the borrower cut the yard with it and then got 3 of his buddies rounded up. Mower was started and blades engaged, then the 4 guys picked the mower up by the deck in an attempt to trim the bushes. Yep...lots of cut fingers. Now this was a weird deal for sure, but the 4 guys SUED the dealer for about a hundred grand....and WON; on a technicality (seat switch was bypassed at time of pickup and nobody bothered to tell him). Point being, you never know what you're up against...but if you try to protect yourself as best you can generally speaking you'll be ok.