General Liability: Who Has It? Why?

buckleyclan

I am considering obtaining General Liability coverage (1M) for my business.
I am curious as to how many folks have, especially fellow Californios.
If you do, what company do you use? Do you recomend them?
What are rates like?

Thanks!
Pat

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You can't direct the wind, but you can adjust your sails!

KentWhitten

You don't have insurance and you're a GC?

To answer your question, legitimate businesses have it and legitimate businesses require it. Anything else is playing Russian Roulette.

That's like not having insurance for your vehicle.

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Custom Cabinetry - Portland, Cape Elizabeth, Scarborough, Kennebunkport, Yarmouth, Falmouth, Cumberland, Ogunquit, Maine

Salmon Falls Cabinetry

buckleyclan

As you may be aware, CA does not require General Liability Insurance.
It is ironic, considering they are the most regulated state in the Union.

I have spoken to no fewer than a dozen small, sole prop, guys like myself, and none has it.
Sure Bonds, and vehicle insurance, an umbrella for tools, etc.
But GL is too expensive for alot of folks...

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angus242

Being sued for a F-up is too expensive for everyone.

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Angus
L+M+O+P=C
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JumboJack

I pay about 2k a year.Worth it to me.That is one thing that is good to help separate yourself from the hacks.

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in texas with framing and cornish people will do it for 3.00 a foot. What do yall think about that? Just laber

mics_54

I have general liability because I can't get a business and professional license as a GC in Alaska with out it.

XanadooLTD

In Ohio you can't wipe your butt on a clients toilet without it. Every job requires GL of at least a million here per occurence here.

JumboJack

But here it is not required.How that is I don't have a clue but it's not.
You would be crazy not to have it IMO...

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in texas with framing and cornish people will do it for 3.00 a foot. What do yall think about that? Just laber

CookeCarpentry

We have to have it in PA to be registered with the state, as well as pull permits in local townships, etc.

Even if it is not required, you can't put a price on peace of mind. Accidents and mistakes happen - hate you to lose in court, as well as have a damaged business reputation.

JumboJack is in the same state as you and his quote of $2k/yr seems reasonable. A little higher than what most of us pay here in PA. But if you break it down, it's only like $5.50 per day....not much to pay for peace of mind (and a good business rep).

JumboJack

I have only been in biz for two years so my volume is low.It can get pricey when you start doing bigger numbers.Mine will prolly go down as I will probably miss the number I projected for this year....just by a smidge.

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in texas with framing and cornish people will do it for 3.00 a foot. What do yall think about that? Just laber

CookeCarpentry

Jack - same here in PA. Based off of volume (amount of sales) as well as payroll (if you have W-2 employees).

My insurance agent told me what the levels were for sales and payroll that would make the premiums increase. Not too concerned about it because that means business is growing.

Though I am slightly off (low) for this year as well.

KellyD&B

I pay about 2K a year also. You cant get any work in NYC without it and I would be terrified to work without it. This city is law suit crazy!

CookeCarpentry

Well, if you have to cut costs somewhere in your initial start-up business I would suggest the following.

1. Exclusively advertise on Craigslist (it's free).
2. Don't pay taxes.
3. Don't warranty your work.
4. Accept cash only payments.

But never, never, NEVER work withought general liability.

buckleyclan

Thanks for all the good feedback. I really do appreciate it.

I recognize that #1 is a good idea and # 4 would be great, but 2 and 3 can't fly--especially in CA. The retarded Legislature passed a bill, SB-800, that effectively makes you warrant your work forever.

Who are the most reputable companies that provide GL in California?
What should I expect for a rate if I am just starting out as a new GC?
Is $2,000/yr a realistic figure?

Thanks again for the feedback
~Pat

__________________
You can't direct the wind, but you can adjust your sails!

HusqyPro

Are you a veteran?

If so you can get really, really, really good rates through USAA. Top notch service as well. They only sell insurance to active duty, retired, or honorably discharged military.

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Bob's Lawn & Landscape
When You Want The Best
Serving the LC Valley & Moscow-Pullman

Mike Finley

I had to read that like 12 times and I'm still not sure if you are joking?

HusqyPro

Mike,

I think he's trying to say something about lesser evils. Like it's less evil to not pay taxes than to not have GL.

Just a guess.

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Bob's Lawn & Landscape
When You Want The Best
Serving the LC Valley & Moscow-Pullman

buckleyclan

Thanks HusqyPro. Yes I have USAA for all of my coverages.
I spoke with them last week and they no longer offer GL in CA.
That's why I am shopping.

Cheers,
Pat

__________________
You can't direct the wind, but you can adjust your sails!

cueball707

I'm in California as well and my rates run about $1,200 a year. I'm a General that does remodeling work and decks.

Astrix

The real, bottom line, true reason for having liability insurance is not to protect other people and give them access to cash if they want to sue you. Nor is it because you can’t get licensing, or it is a requirement of the job contract, or any of dozens of other legal paperwork issues.

The real reason why any business person would have commercial liability insurance is because they are looking out for themselves and for their business. They want to make sure that after sweating and hustling for years and years to build up their business, it isn’t going to be wiped out by one freak incident or by one unsubstantiated allegation. Liability insurance does more than just dole out cash if the third party claimant proves they have a valid claim. It also gives you access to insurance company lawyers who are experienced in handling whatever kind of lawsuit you may find yourself entangled in, and it pays for that legal representation and expertise.

The same is true of automobile liability insurance. When deciding whether to just get the minimum limit required by law or to upgrade and get $1 million, $2 million or maybe even $5 million limits, don’t think of protecting the other unfortunate bloke that might be injured in an accident. Be selfish and think of yourself and your own family.

There is a section in your auto policy called “Underinsured Motorist Coverage” (in USA) or “Family Protection Endorsement” (in Canada). If you or your family members are seriously injured in a car accident caused by another person who is at fault, it is that guy’s insurance that is going to be paying out. If that person only carried the minimum (for example: $200,000) what happens after that limit is reached and that guy’s insurance company doesn’t pay any more? Maybe you’d be able to go after his personal assets but odds are he doesn’t have a lot otherwise he probably would have bought better auto insurance to begin with. With the Underinsured Motorist Coverage, your own insurance company will pay the difference up to your own policy limit. Therefore, when you decide to buy $2,000,000 worth of auto liability insurance, you are actually buying protection for your own children if they get hit by a car crossing the street on their way home from school. (You don’t have to be in a car; the injuries have to be caused because of a car accident.)