I spent some time yesterday calling around to inquire about liability insurance for my new carpentry/renovation/construction business. I’m going through a career change and have decided that I would like to start a one-person company and then partner with existing experienced carpenters / builders.
I was told that as a newbie, I either: a) could not get new liability insurance without having an existing policy for two years or more, or b) could get a policy but only from a special supplemental market where premiums are twice what an experienced guy pay. I was roughly quoted $750 to $1000 for $1Million dollars of coverage, about double what my friends in the business are paying. By the way, I’m in Vermont.
Does anyone have leads, or tips, on obtaining a liability policy for someone just starting out? Many thanx!
-Mark
Replies
Mark,
I'm in southern NY. I pay about $1200.00 per year for 2 million liability.
I am listed as doing interior carpentry. If you say roof or a number of other key word your rates eill be higher.
I'd say your rate ain't bad especially for starting out...........at least you were able to find coverage.
Good luck, keep your books straight and PAY YOUR TAXES ON TIME.
Eric
ditto... new business in Washington, first year premium about $2K for a $1M policy.
WOW!
Fist year premium for $1m was about $450, withh $5000 in tool replacement. That was 5 years ago and now is about $530. I am a wood flooring contractor and also listed for finish carpentry. I don't know if it's available where you are (I'm in the Chicago area), through Grinnel Mutual, the "Trademaster" package. You can check it out online (Google search Grinnel). Good luck!
Wheeze, that's pretty low. What would it be if you were a general?
$1000 for $500,000 in Alaska.
I have metal roofing on mine which might be why it's so high . It also may be because I let my lic. lapse 3yrs while I was working for another company and it looks like I'm starting new.
You don't want to put anything that has to do with concrete on there either it's the same or more than roofing.
Good Luck, Dave
I'm waiting for the guys in California to chime in and blow you all out of the water. I've got a friend in the bay area, been in the remodeling business for over 40 years, and his GL is $80/$1000- $80,000 for $1 million coverage. And the policy covers virtually nothing.
Bob
HOLY SHlT!!! That must be a typ-o!?!
Uh...no. That wasn't a typo- $80,000 per year for $1 million in coverage. And you thought YOU had it bad...
Bob
Just the other day I was bltching about my truck insurance costing $490/year...of course, that's $490/year for a truck worth less than $2,000, so I figure percentage wise I'm still getting screwed more. Damn I hate insurance companies!
ya molten like bob was saying that 490 isn't to cover your truck, its to cover the mercedes you run into while driving it, unless you have something other than liability on a beater truck which doesn't make sense.
i have to agree with you on hating the insurance companies though, unless something happens that is a total catastrophe you are better off just paying for it out of pocket, and even with the catastrophe you may be better off just going bankrupt, cause you won't be able to afford insurance again.
Holy #### !
$1,000 CDN for $2 million In Nova Scotia !On a hill by the harbour
And the policy covers virtually nothing.
Just try to file a claim........see how many of our policies cover nothing.
There is a BIG difference between what your agent is telling you the policy covers and what your paper policy covers. I have a policy that is called "Artisans Policy." It is with NOVA in NY.
Gee, thanks for the compliment but good grief if I have to file a claim!
Only thing that pisses me off as much is the licensing requirement in Westchester County that qualifies a contractor to have a drivers license and no home improvement type judgements against them. Wow, that really qualifies me to perform good work on someones home!
Eric
I guess the next question is whether any of you had had to work through a claim only to realize your liability insurance didn't quite cover you the way you expected. If so, what did you learn from the experience and how would you buy coverage differently if you were me? Or is it really just a matter of reading your policy .. CAREFULLY!Mark in Montpelier, VT
Mark-
Essentially, it's a matter of reading your policy. In general, though Liability coverage is for the ancillary damage caused by the failure of your work- but not repair of the work itself. A few examples:
- If you build an addition, and the addition falls down, crushing your client's legs, the insurance picks up the medical bills, but doesn't pay you to rebuild the addition- in other words, it doesn't cover your faulty workmanship.
- If you install a dishwasher, and the drain hose breaks, flooding the kitchen and damaging the hardwood floors, your insurance won't cover repairing the dishwasher, but it'll cover repairing the hardwood floors.
- If you leave a ladder leaning against a house, and the neighbor climbs up it, falls and cracks his melon, while also breaking your ladder, the insurance will cover his medical bills but won't repair your ladder.
A couple key points to look for:
- Most policies nowadays don't cover the work of subcontractors- they need to carry their own GL (and name you as "additionally insured"), so when the dishwasher the plumber installs damages the floors, the plumber's insurance pays. Your insurance company will want nothing to do with the claim.
- Their will be a long list of items that aren't covered such as mold, mildew, latent construction defects, etc. Be sure that you exclude those same items in your contract, or you'll be on the hook for them later.
Bob
Boy with collapsing additions, leaking dishwashers and falling ladders, perhaps I better stick with my old career!!!
Thank you to everyone who responded. I appreciate the feedback and will keep you posted on how things turn out!Mark in Montpelier, VT
I spent 18 years in the insurance industry insuring all sorts of contractors before starting my own building company. Just a word of advise. Don't tell the agent you are a newbie. Tell him you have been doing this for a number of years (which I am sure you have, just not in a formal manner). I know here in New Jersey they do not check on such information nor do they require any sort of documentation to support such statements. By the way, here in NJ you can get a 500K liab policy for about $450 per year for a one man operation. Good luck.