The Benefits Of Liability Insurance - Marketing & Sales - Contractor Talk

The Benefits Of Liability Insurance

 
Thread Tools Search this Thread Display Modes
Old 05-31-2011, 01:48 PM   #1
Pro
 
MEL's Avatar
 
Trade: Roofing
Join Date: Apr 2007
Location: Detroit
Posts: 825
Rewards Points: 516

The Benefits Of Liability Insurance


How does a homeowner benefit by hiring an insured contractor vs. an uninsured contractor?

What does it do for them?

Is it worth more?

Do you guys know of any good articles in the news that demonstrate the importance of a contractor having liability insurance? I’m looking for a story about a house that got damaged, and a photo would also be needed.
__________________
MEL

Last edited by MEL; 05-31-2011 at 03:46 PM.
MEL is offline  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. ContractorTalk.com DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!

   

Advertisement

 

Old 06-02-2011, 06:40 AM   #2
Lack Of All Trades
 
Darwin's Avatar
 
Trade: Construction & Home Improvement Services
Join Date: Apr 2009
Location: Southeast Michigan
Posts: 1,232
Rewards Points: 500

Re: The Benefits Of Liability Insurance


General Liability protects the homeowner should the contractor get injured or killed on the job. A small 1-man show should get at least a $300k policy. This translates to $75 a month payment. After a year, you get audited. This is a different kind of audit, though. You simply fill out a "questionaire" about your business and send it in to the ins. co. No addtl' paperwork required. They just want to know if your policy is on target in regards to coverage and such.

Otherwise (without coverage), a person working on your home could sue you if they got hurt working there, and win! I sell HO's on this premise.

Another note - In Michigan, you are also required to carry WC coverage if there is more than 1 employee working for your firm.

Advertisement


Last edited by Darwin; 06-02-2011 at 10:32 AM. Reason: clarification
Darwin is offline  
Old 06-02-2011, 06:52 AM   #3
Pro
 
We Fix Houses's Avatar
 
Trade: Remodeling / Carpentry
Join Date: Aug 2007
Location: Greensboro, NC
Posts: 1,748
Rewards Points: 2,252

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by Darwin View Post
General Liability protects the contractor should he get injured or killed on the job. A small 1-man show should get at least a $300k policy
With all due respect my friend I think you may just want to listen today.......

I have to move along at the moment but I'll leave it with this:

Your example does neither.

GL is generally coverage for:
Premises Operations
Completed Operations

Last edited by We Fix Houses; 06-02-2011 at 08:44 AM.
We Fix Houses is offline  
Sponsored Links
Advertisement
 
Old 06-02-2011, 07:11 AM   #4
Lack Of All Trades
 
Darwin's Avatar
 
Trade: Construction & Home Improvement Services
Join Date: Apr 2009
Location: Southeast Michigan
Posts: 1,232
Rewards Points: 500

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by We Fix Houses View Post
With all due respect my friend I think you may just want to listen today.......

I have to move along at the moment but I'll leave it with this:

Premises Operations
Completed Operations
What the heck does that mean? If you want to contribute something useful, speak your mind. Otherwise, what's the purpose? I'm listening...
Darwin is offline  
Old 06-02-2011, 08:42 AM   #5
Superior Firepower
 
skyhook's Avatar
 
Trade: GC HVAC/R Lic. since 1985
Join Date: Mar 2007
Location: 3,077' above sea level
Posts: 5,089
Rewards Points: 3,880
Lightbulb

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by MEL View Post
How does a homeowner benefit by hiring an insured contractor vs. an uninsured contractor?

What does it do for them?

Is it worth more?

Do you guys know of any good articles in the news that demonstrate the importance of a contractor having liability insurance? I’m looking for a story about a house that got damaged, and a photo would also be needed.
The internet is full of stories, pictures, articles and facts. A simple search will lead you to anything you want to know about it.
I have to move along at the moment but I'll leave it with this: Google is your friend.
skyhook is offline  
Old 06-02-2011, 10:26 AM   #6
Lack Of All Trades
 
Darwin's Avatar
 
Trade: Construction & Home Improvement Services
Join Date: Apr 2009
Location: Southeast Michigan
Posts: 1,232
Rewards Points: 500

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by We Fix Houses View Post
With all due respect my friend I think you may just want to listen today.......

I have to move along at the moment but I'll leave it with this:

Your example does neither.

GL is generally coverage for:
Premises Operations
Completed Operations
Sorry buddy but you are misinformed. I know my stuff.

"Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims."

Here's the link.
Darwin is offline  
Old 06-02-2011, 02:16 PM   #7
Pro
 
GettingBy's Avatar
 
Trade: Home Improvement/handyman
Join Date: Aug 2010
Location: DC area
Posts: 2,622
Rewards Points: 6,486

Re: The Benefits Of Liability Insurance


Liability insurance for personal injury depends on what juries decide so it is way more complex to decide how much coverage to have and what the premium should be.
GettingBy is offline  
Old 06-03-2011, 06:14 AM   #8
New Guy
 
meenakshi's Avatar
 
Trade: Insurance
Join Date: May 2011
Posts: 4
Rewards Points: 10

Re: The Benefits Of Liability Insurance


General Liability Insurance includes different types of liability coverage like bodily injury, personal injury, property damage etc.
meenakshi is offline  
Old 06-03-2011, 11:49 PM   #9
Pro
 
researchhound's Avatar
 
Trade: interior painting
Join Date: Sep 2010
Location: Oregon
Posts: 113
Rewards Points: 75

Re: The Benefits Of Liability Insurance


In Oregon, contractors (anyone who performs construction related work) must carry liability insurance and a bond. The levels vary according to what contractor designation you place yourself in. There are four levels for residential contractors and five levels for commercial contractors. The levels are based on different factors that I won't go into here. The lowest amount of liability insurance required is $100,000 and the highest is $2,000,000. My classification (residential specialty contractor - I only do interior painting) requires me to have $300,000 worth of coverage but I have a $1,000,000 policy because $300,000 won't cover s--t. I'm giving serious thought to upping it to $2,000,000. Why? Just visualize a big extension ladder falling on someone's little kid.
researchhound is offline  
Old 06-04-2011, 12:34 AM   #10
Roofing Contractor
 
Jason-F's Avatar
 
Trade: Roofing
Join Date: Jul 2009
Location: Red Deer Alberta Canada
Posts: 260
Rewards Points: 264

Re: The Benefits Of Liability Insurance


ladder kills= 300k will be fine.
ladder maims and paralizes = you need the 2 million with the 25 million umbrella policy.
__________________
www.remstarroofing.com
Jason-F is offline  
Old 06-04-2011, 12:56 AM   #11
Pro
 
RobertCDF's Avatar
 
Trade: Custom deck builder
Join Date: Aug 2005
Location: Colorado Springs, Colorado
Posts: 9,177
Rewards Points: 1,533

Re: The Benefits Of Liability Insurance


GL would cover damage you do to the homeowners property, the injuries it would cover (in most cases) would be injuries to 3rd parties, ex the ladder falling on the homeowner would be covered (medical expenses), the ladder falling on your employee (medical expenses) would be covered by work comp. It is critical for BOTH policies to be in place.
RobertCDF is offline  
Old 06-04-2011, 01:03 AM   #12
Pro
 
researchhound's Avatar
 
Trade: interior painting
Join Date: Sep 2010
Location: Oregon
Posts: 113
Rewards Points: 75

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by Jason-F View Post
ladder kills= 300k will be fine.
ladder maims and paralizes = you need the 2 million with the 25 million umbrella policy.
Got that right. That's why you want a properly formed and run LLC - separate your personal assets from those of the business and keep it that way.

Last edited by researchhound; 06-04-2011 at 01:17 AM.
researchhound is offline  
Old 06-04-2011, 06:48 AM   #13
General Contractor
 
greg24k's Avatar
 
Trade: New Home Construction-Additions-Remodeling
Join Date: May 2007
Location: NJ
Posts: 7,660
Rewards Points: 8,474

Re: The Benefits Of Liability Insurance


insured contractor= HO is protected

uninsured contractor= HO should pray nothing goes wrong or he will be living in trailer park or changing diapers on that contractor if something goes wrong.
__________________
I never lost a cent on the jobs I didn't get!
greg24k is offline  
Old 06-04-2011, 07:44 AM   #14
I'm a Mac
 
Chris Johnson's Avatar
 
Trade: ICF Construction
Join Date: Apr 2007
Location: Hog Town
Posts: 5,487
Rewards Points: 4,254

Re: The Benefits Of Liability Insurance


Let me add to Greg's post.

Uninsured contractor can lose any assets he has accumulated. And if the lawyer is really good he will get through the corporate veil and take your personal assets as President and CEO of the corporation has a personal responsibilty to ensure the corporation are protected
__________________
Chris
Chris Johnson is offline  
Old 06-04-2011, 11:38 AM   #15
Finishing Carpenter
 
Mrmac204's Avatar
 
Trade: finishing Carpenter
Join Date: Dec 2006
Location: Coquitlam B.C. Canada
Posts: 1,332
Rewards Points: 720

Re: The Benefits Of Liability Insurance


I carry Liability, coverage is 2 million general 5 million aggregate and some other language that I do not understand.

cost to me is $960/year, $1,000 deductable, and it covers my tools as well, but right now I'm not sure how much as I haven't read the policy for quite a while.

I use this as a sales incentive, I show it to my prospective clients along with my proof of WCB. It doe's help to close some sales.

If I do something wrong and I get sued without Insurance? I could lose my house, car and other things. This insurance is cheap in my opinion.

At the beginning of each year I budget for this, I put aside money to cover the insurance and the commercial coverage on my vehicle.

I was asked the other day by a person in a lumberyard (sales guy) how much do I charge to install crown? I said $6.75/ft. caulked and filled. He says he does this for $3/ft. no caulking/filling. Ok, but if I put a nail through a pipe or wire and cause damage? It won't put me onto the street.

I read and read on this forum, trying to figure out how much yada yada. Someone said one day, what do you think you are worth? and do you account for all of your costs, and THEN have a markup for profit?

I used to charge $4.50/ft for crown, but after doing several and at the end of the job just able to cover costs and bills, I thought what the heck, either I make a profit or I'm wasting time. Surprisingly it's working, I don't get all bids, but the ones that I do get I make a profit on.

Sorry for the thread drift back to Insurance!
Mrmac204 is offline  
Old 06-04-2011, 12:45 PM   #16
Pro
 
researchhound's Avatar
 
Trade: interior painting
Join Date: Sep 2010
Location: Oregon
Posts: 113
Rewards Points: 75

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by Mrmac204 View Post
I
I was asked the other day by a person in a lumberyard (sales guy) how much do I charge to install crown? I said $6.75/ft. caulked and filled. He says he does this for $3/ft. no caulking/filling. Ok, but if I put a nail through a pipe or wire and cause damage? It won't put me onto the street.

I read and read on this forum, trying to figure out how much yada yada. Someone said one day, what do you think you are worth? and do you account for all of your costs, and THEN have a markup for profit?

I used to charge $4.50/ft for crown, but after doing several and at the end of the job just able to cover costs and bills, I thought what the heck, either I make a profit or I'm wasting time. Surprisingly it's working, I don't get all bids, but the ones that I do get I make a profit on.
I'm impressed. A contractor who does dental work on the side. Must help when things get slow in the off season. Not sure about the use of nails and caulk though.
researchhound is offline  
Old 06-05-2011, 08:22 AM   #17
Finishing Carpenter
 
Mrmac204's Avatar
 
Trade: finishing Carpenter
Join Date: Dec 2006
Location: Coquitlam B.C. Canada
Posts: 1,332
Rewards Points: 720

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by researchhound View Post
I'm impressed. A contractor who does dental work on the side. Must help when things get slow in the off season. Not sure about the use of nails and caulk though.
ooohhhhhhh ok now, have I got a deal for you, see I normally do this for about $10/ft, but as I have some extra crown that's taking up space in my garage I can supply this for the astounding fee of $7/ft!!!! and we are taking a loss!!! today only!!! cash. the crown is "slightly" used, but you can't tell. hehehehehehe gotcha
Mrmac204 is offline  
Old 06-05-2011, 10:09 AM   #18
Pro
 
GettingBy's Avatar
 
Trade: Home Improvement/handyman
Join Date: Aug 2010
Location: DC area
Posts: 2,622
Rewards Points: 6,486

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by Mrmac204 View Post
I carry Liability, coverage is 2 million general 5 million aggregate and some other language that I do not understand.

cost to me is $960/year,
So your ins. company's estimate of your yearly risk is 960/2,000,000 = 1 chance in 2080 that you will have a judgement against you of this size. This risk per year is slightly more than getting killed in a motor vehicle crash.

Last edited by GettingBy; 06-05-2011 at 10:12 AM.
GettingBy is offline  
Old 06-05-2011, 12:51 PM   #19
Pro
 
RobertCDF's Avatar
 
Trade: Custom deck builder
Join Date: Aug 2005
Location: Colorado Springs, Colorado
Posts: 9,177
Rewards Points: 1,533

Re: The Benefits Of Liability Insurance


As you add employees and volume of sales that cost of insurance will increase. Just keep that in mind, my liability ins is over 4k a year. Never had a claim.
RobertCDF is offline  
Old 06-05-2011, 12:51 PM   #20
Pro
 
researchhound's Avatar
 
Trade: interior painting
Join Date: Sep 2010
Location: Oregon
Posts: 113
Rewards Points: 75

Re: The Benefits Of Liability Insurance


Quote:
Originally Posted by Mrmac204 View Post
ooohhhhhhh ok now, have I got a deal for you, see I normally do this for about $10/ft, but as I have some extra crown that's taking up space in my garage I can supply this for the astounding fee of $7/ft!!!! and we are taking a loss!!! today only!!! cash. the crown is "slightly" used, but you can't tell. hehehehehehe gotcha
Crown work by the foot? Hmmm... I know I have a big mouth (or so I'm told) but even at the great rate of $7/ft. it may be more than I need.

Advertisement

researchhound is offline  


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Liability Insurance WilliamH Roofing 14 04-18-2019 02:21 PM
Liability insurance rates? bruceknee Sandblasting 9 05-09-2016 03:17 PM
liability insurance brianford Business 5 04-06-2011 06:43 PM
What r u paying for Liability Insurance sady Carpentry 20 12-17-2004 09:42 AM

Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for
PROFESSIONAL CONTRACTORS ONLY!

At DrywallTalk.com we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created www.DIYChatroom.com DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?