Cheapest small business liability insurance for carpenter?

[woodwarda99]

I am a small business owner without any employees and I was looking to get liability insurance to be covered as a requirement for being a subcontractor for a larger basement finishing company in Denver. Currently paying about a grand for 300,000$ in general liability coverage, but need a minimum 2,000,000$ policy to work for these guys. Anyone got any suggestions of a Liability Insurance provider that wont break the bank for my coverage? I dont know of many and currently use Hiscox.

 

[rocky100370]

I use Columbia Insurance. Runs me $800/yr with 1mil in coverage. You can also check a company named "3" and see what they can do. Using an insurance broker may be your best bet. Good luck.

 

[Rob Z]

I know this is a little late, but my experience with Erie was always very good.  I switched to Erie from the  mid-90's (maybe '96?) through the end of 2015.  Commercial auto, Workmans Comp, and Liability.  The annual audits to reconcile payroll with the WC totals were a breeze compared to what friends went through for their policies with other companies. On occasion when I looked at rates elsewhere, I always felt Erie was a reasonable cost.  A few no-name companies had rates lower but they were sketchy.

 

[rst]

I second the recommendation for Erie, I have all my insurance with them after using State Farm for 40 years.  After State Farms agent were converted to salaried positions and our original agent past away, the company became a royal PITA.  I use Erie for my commercial company, Entrance Technologies.  I was paying close to three thousand $ a year for three million for one customer.  I finally gave up that customer after realizing that I only cleared $900.00 the last year of working for them.  Now I only sell them parts, not work in the stores, so do not need liability.

 

[Packard]

I am not supporting this action, but simply describing it.  It worked for a customer of mine many years ago.

He set up a separate corporation and transferred all his assets to that corporation (don’t ask me how.  I don’t have any idea at all.).

He then leased all the assets from that corporation to use in his business.  When he went bankrupt, there were no assets to claim.  And since he leased the building, he reopened in one week without every having to move any equipment. 

We tried to take possession of our merchandise, but he said if we did he would call the police and have us arrested for theft. 

Truly unscrupulous, but apparently effective.  We continued to sell to his but 100% cash in advance.  (And he still managed to screw us again.)

If you have no assets, then it can be cheaper to lose what small amounts of cash you have in your business account than it costs to get insurance.

I would note that most jurisdictions have specific levels of insurance required for the contractors’ permit.  So you might want to learn what the insurance requirements are for your area.

But that is also fraught with risk, as many jurisdictions have rules about what kind of business can be run from a residence.  Where I lived on Long Island, only doctors and lawyers were allowed to run a business from their homes.  Though my accountant did so for many years.  I think that rule is regularly violated, but if your neighbor does not like you, it can be a problem.  He would only need to report you and they would make you obtain a commercial address.

 

[squall_line]

I am not supporting this action, but simply describing it.  It worked for a customer of mine many years ago.

He set up a separate corporation and transferred all his assets to that corporation (don’t ask me how.  I don’t have any idea at all.).

He then leased all the assets from that corporation to use in his business.  When he went bankrupt, there were no assets to claim.  And since he leased the building, he reopened in one week without every having to move any equipment. 

My understanding is that this is how Sears and other retailers were bled dry of all of their capital and put out of business by their purchasers.

The post by [member=25351]rst[/member] is a helpful reminder that sometimes you end up in a situation where you land a client whose certificate requirements are higher than either your legal minimums or your otherwise necessary minimums and you have to make decisions a) whether to take them on as a client, and b) whether to keep them as a client in the future.  Failure to re-evaluate that on a regular basis can put you at a particular disadvantage, such as paying $3000/year to keep a $900/year client on the books.

 

[morts10n]

I have had commercial liability for my leased shop for 15 years around $800 per year.  2 years ago they told me I could have Liability for my whole install business for $175 more

 

[Holzhacker]

I had Erie for many years. Seemed fine. I never had a claim. My agent switched me to Hastings Mutual a number of years ago.
I've had some sort of GL for around 35 years. Currently have $2mil GL that costs around $1200-$1400 a year.

 

[Crazyraceguy]

I am not supporting this action, but simply describing it.  It worked for a customer of mine many years ago.

He set up a separate corporation and transferred all his assets to that corporation (don’t ask me how.  I don’t have any idea at all.).

He then leased all the assets from that corporation to use in his business.  When he went bankrupt, there were no assets to claim.  And since he leased the building, he reopened in one week without every having to move any equipment. 

We tried to take possession of our merchandise, but he said if we did he would call the police and have us arrested for theft. 

Truly unscrupulous, but apparently effective.  We continued to sell to his but 100% cash in advance.  (And he still managed to screw us again.)

If you have no assets, then it can be cheaper to lose what small amounts of cash you have in your business account than it costs to get insurance.

I would note that most jurisdictions have specific levels of insurance required for the contractors’ permit.  So you might want to learn what the insurance requirements are for your area.

But that is also fraught with risk, as many jurisdictions have rules about what kind of business can be run from a residence.  Where I lived on Long Island, only doctors and lawyers were allowed to run a business from their homes.  Though my accountant did so for many years.  I think that rule is regularly violated, but if your neighbor does not like you, it can be a problem.  He would only need to report you and they would make you obtain a commercial address.

There is a whole lot of this kind of thing going on, but some of it is forced by law.
I learned decades ago, from a friend who owned a motorcycle repair business, that "the business" could not own "the building/property". Because of this legal issue, his wife owned the building and he (as the business owner) had to lease/rent it from her. It wasn't a problem, they were together for life, it just seemed odd to me?
The same is true for the company where I work now, and technically the office workers and shop workers are employed by different companies. One entity owns the real estate the others lease from it.

As far as running a business from your home, it would probably fall under zoning regulations. This would vary wildly depending on the area, some of which may have changed (or exceptions made for) lately.
A lot of people have been "working from home" since the pandemic, but I have no idea where the line would be drawn there? I would bet that there are some legal definitions that would separate "working from home" and "running a business" in a home.
I would suspect that businesses that would be entirely on-line or by phone would be seen much differently than one that would require "storage" of some kind (inventory, equipment, etc).
Then there is the next level....foot traffic. That one is going to draw even more attention/scrutiny.
Staying within legal boundaries is always a challenge. These things should be plainly obvious, yet generally are not.

 

[Packard]

That same customer managed (even though his payment terms were “payment in full in advance of shipment”) to rip us off one more time. [eek]

We sold large sheets of painted aluminum that were used for aluminum awnings.  We shipped on our own truck. 

The customer called and said that several sheets had arrived damaged and asked for a salesman (me) to examine the damaged sheets and authorized replacement.  I did authorize replacement.

We delivered the replacement later that week and after off-loading the shipment our driver was supposed to pick up the damaged sheets and return to the factory. 

When asked about the damaged sheets, the customer said, “Oops, sorry.  We already used them.”

The driver wanted to take back the sheets that he had just delivered, but the customer said it was now his property and he would call the police if the driver tried to retrieve those sheets. 

So he stuck it to us one more time. Almost funny. The moral is, “Bad players are very experienced at being bad players and will outwit us almost 100% of the time.”

 

[Crazyraceguy]

We have run across "attempts" at that too. The secret to this is to require an RMA (return material authorization) to be applied to the account. The damaged sheets would be returned before the replacements could be delivered. It becomes an exchange at that point.

This is like every dumb sign or rule you ever saw implemented. It's only there because someone already did it, even though it's beyond the thinking of normal (or substitute honest in this case) people.
You only implement this kind of exchange from learning the hard way.