Recommendations- Liability Insurance?

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sw_ross

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At this time I'm doing R&D related to converting my currently held Non-Contracting Master's license over to a Contracting Master's license. I'm in North Dakota. It's relatively easy, other than the forms, etc, hurdles with the state here.

We're required to have $500,000 worth of liability insurance here.
Generally, what do all of you get for liability insurance? What company do you use? How much can I expect to pay for this insurance? Is cost based on size of operations (#of employees, etc)?

Last year I talked to my State Farm agent that I have other insurance through and they were talking a price of around $650/year? (If I remember correctly!)

TIA for info related to this!
 
It is not real pricey, at least around here.

You need to remember the most important reason for liability insurance is not to pay off someone if they manage to win a law suit against you, but having someone to pay the lawyers bills. The insurance company covers the legal bills as well.

Incidentally, before you decide to become a contractor you really should pay some money to a good business lawyer and a good business accountant. While it is true you are not required by law to do so, it will be money well spent.
 
I have a $2,000,000 policy through State Farm and will have to get back to you with how much it is. But more importantly you should separate yourself from your business buy setting your business up as an LLC, Inc, or something along those lines. If something were to happen you couldn't get sued personally.
 
EATDIRT said:
I have a $2,000,000 policy through State Farm and will have to get back to you with how much it is. But more importantly you should separate yourself from your business buy setting your business up as an LLC, Inc, or something along those lines. If something were to happen you couldn't get sued personally.
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This is only sort of true. One of the reasons you need to talk with an attorney and accountant upfront is so you can get good advice about how to make sure that your personal assets are separate.

I seem to recall in at least one state if you personally guarantee debts of an LLC that you own, you can have issues showing you and the LLC are not the same entity.

I have also heard that in some places if you sign for goods with your own name you may be liable for paying for them even if they are for the use of the LLC. What has been suggested is a stamp that just says "Received, the date, and the LLC name". No signature required and it is clear that the LLc received the goods and not you.

These are things lawyers and accountants do for a living.
 
petersonra said:
This is only sort of true. One of the reasons you need to talk with an attorney and accountant upfront is so you can get good advice about how to make sure that your personal assets are separate.

I seem to recall in at least one state if you personally guarantee debts of an LLC that you own, you can have issues showing you and the LLC are not the same entity.

I have also heard that in some places if you sign for goods with your own name you may be liable for paying for them even if they are for the use of the LLC. What has been suggested is a stamp that just says "Received, the date, and the LLC name". No signature required and it is clear that the LLc received the goods and not you.

These are things lawyers and accountants do for a living.
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Yes, get a lawyer and/or accountant to help set you up. One of the things a former boss of mine did was to pretty much shift all the tangible assets of the company to different corporate entities. The 40 or so trucks were all leased from a company he owned, and had one customer. The building was owned by another company he had set up, and we paid rent to that company. He may have separated some of the other parts of the business but those are the only ones I know. So, if someone sued, the trucks and the building weren't actually company property.
 
I had a $2,000,000 umbrella policy years ago when I worked for myself, included riders for the truck, theft from it, personal injury, etc. Cost me about $800 a year iirc. I had to itemize every single tool in the truck for the theft coverage, but it only took a few hours to do that, get mfg part numbers, costs, etc. I was most worried about theft from/of my truck, and other contractors doing things like tripping over my extension cords and suing me. Contracts covered acts of god, vandalism, etc.

I did not have an LLC at the time. In today's increasingly litigious society, consulting with a lawyer, accountant and insurance agent are all prudent.
 
Thanks!

Thanks!

I definite would talk to an accountant, and probably have them help me set up my book keeping!

I also would seek consultation regarding setting up the type of ownership.
I was assuming an accountant would be able to do that, but the lawyer route is probably good advice!

Thanks!
 
sw_ross said:
At this time I'm doing R&D related to converting my currently held Non-Contracting Master's license over to a Contracting Master's license. I'm in North Dakota. It's relatively easy, other than the forms, etc, hurdles with the state here.

We're required to have $500,000 worth of liability insurance here.
Generally, what do all of you get for liability insurance? What company do you use? How much can I expect to pay for this insurance? Is cost based on size of operations (#of employees, etc)?

Last year I talked to my State Farm agent that I have other insurance through and they were talking a price of around $650/year? (If I remember correctly!)

TIA for info related to this!
Click to expand...

Federated Insurance

Don't forget O & E insurance as well.
 
O & E Insurance? Is that a company?

O & E Insurance? Is that a company?

Haven't heard of O & E Insurance before, assume it's a company?

Thanks!
 
Errors and Omissions insurance.
It covers liability for things you don't do as well as things you do wrong. It is essential for anyone who does design as well as construction.

Sent from my XT1585 using Tapatalk
 
sw_ross said:
At this time I'm doing R&D related to converting my currently held Non-Contracting Master's license over to a Contracting Master's license. I'm in North Dakota. It's relatively easy, other than the forms, etc, hurdles with the state here.

We're required to have $500,000 worth of liability insurance here.
Generally, what do all of you get for liability insurance? What company do you use? How much can I expect to pay for this insurance? Is cost based on size of operations (#of employees, etc)?

Last year I talked to my State Farm agent that I have other insurance through and they were talking a price of around $650/year? (If I remember correctly!)

TIA for info related to this!
Click to expand...
State Farm is my provider, about $700/year. Can't recall how much coverage is, I know it is at least 1 million, might be 2 million though. seems there isn't much difference in cost between the two and I went with 2 million.

These days even 2 million doesn't cover a lot when it comes to what is the worst that can happen. If you do light industrial or commercial work, and your installation was at fault for burning the place down, 2 million may not even cover the claims that may be filed against you.

500,000 may cover most single family dwellings, but then you have contents, displacement, injuries, or worse yet loss of life.
 
Thanks!, Also type of business setup.

Thanks!, Also type of business setup.

Thanks for that info! I'm planning on having a conversation with my State Farm agent today.

Also am learning about the type of business to create (sole proprietor vs LLC, etc), will plan on having a conversation with a lawyer and/or accountant.

Any recommendations about that topic is greatly appreciated as well!
 
petersonra said:
This is only sort of true. One of the reasons you need to talk with an attorney and accountant upfront is so you can get good advice about how to make sure that your personal assets are separate.

I seem to recall in at least one state if you personally guarantee debts of an LLC that you own, you can have issues showing you and the LLC are not the same entity.

I have also heard that in some places if you sign for goods with your own name you may be liable for paying for them even if they are for the use of the LLC. What has been suggested is a stamp that just says "Received, the date, and the LLC name". No signature required and it is clear that the LLc received the goods and not you.

These are things lawyers and accountants do for a living.
Click to expand...

Well I know for a fact at least in the state of Wisconsin when you have a LLC you can't be sued personally. This would include any of your personal property that you own as an individual. This would include and property, vehicles, bank accounts, etc. Could you be more specific exactly what places you've "heard" what you are claiming.
 
EATDIRT said:
Well I know for a fact at least in the state of Wisconsin when you have a LLC you can't be sued personally. This would include any of your personal property that you own as an individual. This would include and property, vehicles, bank accounts, etc. Could you be more specific exactly what places you've "heard" what you are claiming.
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RU sure about that?

INC, LLC, etc. adds an additional barrier between an individual and the business, but there are still ways to find holes in that barrier.

It might take some proof of an act of gross negligence or willful intent to help find some of those holes though.
 
As for accounting I just use a quickbooks program to keep track of everything that comes in and goes out. At the end of the year I just submit a copy of my books for the year to my accountant. So all of my book keeping is done by me as i go along. If I have any questions I just call my accountant, but honestly I have been doing things this way for over 10 years I have the book keeping thing down. I did just have my taxes done for the year and it only cost me $335. This included my income, sales, and estimated payments for the year.
 
kwired said:
RU sure about that?

INC, LLC, etc. adds an additional barrier between an individual and the business, but there are still ways to find holes in that barrier.

It might take some proof of an act of gross negligence or willful intent to help find some of those holes though.
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I am sure because I have personally had an incident come up. I wasn't any part of the incident but the lawyers tried to sue everyone that was at the site. My insurance company handled everything. The lawyer couldn't touch me personally. But they tried to sue my business and lost. So I'm not making any assumptions here, I speaking from real world experience.
 
kwired said:
RU sure about that?

INC, LLC, etc. adds an additional barrier between an individual and the business, but there are still ways to find holes in that barrier.

It might take some proof of an act of gross negligence or willful intent to help find some of those holes though.
Click to expand...

kwired I totally agree with your last sentence though. But I personally would never go down that road.
 
EATDIRT said:
Well I know for a fact at least in the state of Wisconsin when you have a LLC you can't be sued personally. This would include any of your personal property that you own as an individual. This would include and property, vehicles, bank accounts, etc. Could you be more specific exactly what places you've "heard" what you are claiming.
Click to expand...

http://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html

among many other credible sources.


As for absolute immunity for WI LLCs, I think you are getting really terrible advice about this. I would think the WI state bar association is a credible source of legal advice for WI.

http://www.wisbar.org/NewsPublicati...Article.aspx?Volume=79&Issue=2&ArticleID=1133


LLC Application. The Wisconsin Supreme Court has urged flexibility in applying the "alter ego" elements due to the equitable nature of the remedy. Flexibility has become especially paramount with the advent and popularity of new business entities, such as limited liability companies (LLCs). Wisconsin appellate courts have not specifically addressed the issue of whether an LLC's veil can be pierced to impose personal liability on LLC members or managers. That perhaps is because Wis. Stat. section 183.0304 ("Liability of members to 3rd parties") appears to expressly mandate veil piercing under appropriate circumstances. The statute provides that although an LLC's debts, obligations, and liabilities "shall be solely the debts, obligations and liabilities of the limited liability company," a court is not precluded from "ignoring the limited liability company entity under principles of common law of this state that are similar to those applicable to business corporations and shareholders in this state and under circumstances that are not inconsistent with the purposes of this chapter."
Click to expand...
 
kwired said:
RU sure about that?

INC, LLC, etc. adds an additional barrier between an individual and the business, but there are still ways to find holes in that barrier.

It might take some proof of an act of gross negligence or willful intent to help find some of those holes though.
Click to expand...

That's pretty much it. It's still not a cloak of invulnerability. And it can be almost as expensive to defend against someone trying to "pierce the corporate veil" as it is against the claim itself. Beware that depending on your carrier, they may settle the suit and payout something rather than go to court, and that settlement may ding your rates. If you push back, they'll be happy to let you fight the suit on your own dime if you want.
 
petersonra said:
http://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html

among many other credible sources.


As for absolute immunity for WI LLCs, I think you are getting really terrible advice about this. I would think the WI state bar association is a credible source of legal advice for WI.

http://www.wisbar.org/NewsPublicati...Article.aspx?Volume=79&Issue=2&ArticleID=1133
Click to expand...

I never claimed nor implied absolute immunity. I was just saying what I have experienced personally. I will definitely admit I should have chosen my words more carefully.
 
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