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.
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Thread: Insurance Blue's
01-24-2007, 04:16 PM #11