Insurance Blue's

[HARDROCK]

I'am Trying To Find Some Affordable Insurance For My Welding
Buisness.but I'am Not Having Any Luck Either Everybody Is
Totally Out Of Line On Thier Prices Or It Does Not Include
Garage Keepers.i'am Between A Rock & A Hard Spot What Do You
Guy's Think.

[Winger Ed.]

Keep looking for a carrier, or hump up & pay the piper.

Insurance is always high for a new business with no track record of being accident free,, or lawsuit free.

Such as it is, pay what ya gotta pay, then try to charge enough more for your work to cover it while staying competively priced.

In that situation, I don't see many more options to pick from.

.

[glockdoc]

Insurance is always high for a new business with no track record of being accident free,, or lawsuit free.

Each state's laws are different but there may be another option. Make yourself judgment proof and then do without. Once you become established insurance should become affordable and you can then run with the big dogs. Just be careful if you go this route, you don't want to have to explain to the wife and kids why they are living under a bridge. Good luck

[FusionKing]

So how would you even get on somebodies property?? Judgement proof?? Are you referring to a legal document?
What about becoming bonded?

[jfsmith]

Try asking your local business association or Chamber of Commerce about membership and their insurance programs.

I have a 8 year track record and never been sued, never had a work place accident, never had a customer injury.
I pay about $200 a month for my coverage thru Grange. But I had to put up lots of fire extinguishers, first aid kits, eye wash stations and a few other things that I can't remember at the moment.

Plus I had the local fire chief come over and gave me an inspection, which he passed me, but also gave me some suggestions to make things better. Plus a telephone within close reach is not a bad idea either.

Also your insurance carrier may ask if they can check your background and maybe your spouse's background. Most things don't really count after 2 to 3 years, but your agent may not tell you that. These checks are both credit and criminal checks. Being judgement proof means that you have a recent bankruptcy and having no property what so ever in your name. BUt you will never be able to get a SBA loan or a bank loan for your business.

Or your agent will just ask one or two questions and give you a great rate.

Jerry

[glockdoc]

being judgment proof is having no assets in YOUR NAME. Then if you are sued and someone gets a judgment, you have nothing that can be sold to satisfy the judgment. That also means that you can never own anything in your name. Doctors used to put everything in their wife's name, not sure if they still do it.

Here in TX your house, motor vehicle, couple guns, horse, household goods, tools, wage garnishment, and some other stuff are exempt from judgments. Each state is different on the rules. i have a couple judgments against deadbeat renters and those judgments along with 50¢ won't even get me a cup of coffee in this state. TX is considered a debtor's state and I always seem to be the one that rents them a house.

Obviously, if you want to sleep well at nite it's better to have the insurance coverage. If you choose the "self insured" route you would be solely responsible for any claims made against you. If you do good work and customers are satisfied then the insurance thing should never be an issue. You will also lose a lot of work because you don't have the necessary insurance.

[Tex]

Insurance

Do you know there's an insurance policy available for every phase of building and launching a sattellite? The thing is that it's so expensive, nobody buys it. Think about it. Also, can you set up your buisiness as an LLC so nobody can get your house and personal stuff should they decide to sue you. Anybody have an LLC who can shed some light on this? I do not so don't take my advice as law but sometimes you gamble depending on what you have to loose.

[jfsmith]

Check with a business attorney on the LLC situation. You can be sued as well as the LLC in some states, as well as any one else involved in your company.

To create an LLC, you can buy the kit at any of the major office supply stores. It's easy fast and cheap, if it will work for you in your state. Plus you have to check on any situation that you may encounter that crosses state lines or deals with a foreign company or even just a foreigner.


America the land of the law suit!.

Jerry

[glockdoc]

There used to be some tricks that could be done with trusts but I believe the recent bankruptcy law changes may have cracked down on some of them. Google "asset protection" to get more info on this subject.

America the land of the law suit!.

The best legal system that money can buy.

[calweld]

We had a thread something like this on the motorsports board last year . .

Insurance is needed for two reasons, one is to protect your assets, the other is you have a responsibility to properly compensate anybody you have injured or caused loss to through your business activities.

Somebody said something about "bonds" . . . well, a bond is simply to insure performance, or insure trust, I have to maintain a surety bond as a condition of my contractor's license. All it does is insure performance on my part for any contract I may enter. If the bonding company has to pay out on it, they can turn right around and bring action against me to collect what they paid.

And this talk about becoming "judgement proof" by transferring or hiding assets is to my mind gutless and irresponsible. Incorporating or creating an LLC is one thing, and something any prudent businessman should consider, it gives you some protection, but not complete protection, but going to the lengths of having no visible assets is just taking it too far.

The big problem starting out is almost any decent, highly rated insurance company is going to want to see three years of "loss runs" before they'll even consider writing you up. There are some "not so highly rated" companies that will do you, it's just a matter of finding them. Generally, they'll either charge more or offer less coverage, but at this point you don't have a lot of options.

I'd like to add a disclaimer here, also. Insurance is very much a state-regulated industry, things can be much different state-to-state, my experience is in California, what I said above may or may not be true everywhere.

The best suggestion I can offer is network with other businesses, not necessarily welding businesses, but customers, suppliers, your barber, contractors, etc. You want the name of the agent they deal with, not all agents are created equal, and some are much better on commercial policies than others. Just calling agencies won't do it, you just get the person who's not occupied right then, and that's probably not the right person anyway.

[SkidSteerSteve]

Agents

I'm going to second Calweld's comments about agents. A good agent can make or break your entire situation. As with most things in life, the cheapest bid is not always the best in the long run. We had a situation about a year or so ago with a fire that caused a 100% loss on a structure. It was a lightning strike, nothing to do with us or any contractor. We have a long running history with our agent. He is a local guy that lives in the local community and knows what needs to me known in our market environment. It was at the time that the relationship really shined in that he was able and willing to go to bat for us during the claims process. Yes, we can probably save some money somewhere else, but good professional relationships are hard to come by.

As far as the LLC and INC issues, here's my opion. Personally I have an LLC structure for my business operations and run everything under that name. It does offer some shielding for my personal life. The problem is, if somebody does come after the LLC, then they get all my tools, equipment and such. I'm still personally safe...er, but have nothing to rebuild with. Fact of the matter is if somebody really wants to get you, they probably will. With that in mind, you still need insurance. It protects you and it protects those that you are working for and around. Not to mention there are a lot of jobs you simply can't get without it. If you do hire any portion of your work out to another contractor, require them to have it as well. This way when you get an audit, you can show the insurance company that you are looking out for them by putting another layer of protection in place. Otherwise, if you are using uninsured people, they will charge you for their portion of the risk as well, plus a generous fee for having to deal with it. We cut our insurance premium in HALF by going back through and doing a detailed report on people we hire. On top of that it is just good business practices. Also, put an emphasis on lowering your risk factor to an underwriter. Keep this principal in mind: An upgrade in safety is typically a one time expense. Premiums are a reoccurring expense. A little spent to improve can pay off in the long run by saving you $ every six months. Or you can save a little, put some people at risk, and pay more every installment....

Well, that doesn't really help the whole situation of getting a policy, but it's some thought in general. What I did was simply pay for the higher premiums until the proving period was over. Just had to figure that into the numbers for start up costs and scrapped by for the first bit until some business "momentum" would allow me to actually take a pay check home. I saved for about five years and still worked a part time job when I start my own show. Had to just to eat. Keep in mind to provide proof of any sort of related work that you have done in the past. I was able to use some experience working for another business as credit to my proving time for some areas of coverage. The underwriter simply wanted proof of time spent in that particular industry, not necessarily as time owning a company in it.

I agree, America is becoming the land of the law suit, but I will take business here any day. That's why so many people want to come here. Basically all you have to do is say "I'm in business for myself" and there you go. Granted, there are all levels after that, but at least you CAN do it. The American dream is not that everyone WILL succeed, it's that everyone CAN succeed. OK, off the soap box...

Good luck with the search and let us know if you discover a good avenue that we haven't discussed.

SSS

[jfsmith]

Skid,

Very well put, but you always have a business partner in America, the IRS. I find this is the land of plenty and a great place to do business.

Jerry

[sjmiller]

Insurance Blues...

I'd be willing to bet that everyone that reads these messages is a DIY type. We design, then we fabricate, and we elicit help as needed - all the time learning in the process. That being said, unless you want to read book after book on legal crap and learning tax codes - hire a business consultant/lawer to guide you through the maze.

Decision #1 - Sole proprietor, Corporation, Sub-S Corp, LLC
- Personal liabilities of each
- Tax advantages of each
Decision #2 - Business liabilities
- SSI
- Fed Taxes
- State Taxes
- Medicare
- Equipment write offs
Decision #3 - Book keeping
- Home grown
- Business Accounting package (Intuit)
- Payroll services
Decision #4 - Insurance
- Look for a recommendation from someone already insured in the trade
- it saved me $2500 a year - $350 a year vs. $2850 a year
- Limit your coverage to the work performed.

Steve

[Darmik]

What about incorporation.
You have a welding business and you personaly own the welding equipment. so what you do is rent the welding equipment to your welding company in case you do get sued your welding company does'nt own the gear you do
that's kinda how a lawyer put it to me.

If you people can add to this or tell me somthing different I'm all ears
now having said this I do agree with if somebody wants you bad enough
they will get you.