Is it worth pursuing?

[Jeff D.]

Hello.I'm a new guy here,and I thought I'd get other's opinion on my situation.
I drive semi for my main job,but have some equipment(dump truck,skid steer,TLB)that I've purchased over the years,to use on my property.A friend,who is also a contractor,had asked me to work for him,using my equipment,in my off time.I only drive my semi 4 days/wk in the spring and summer,so I've time to do jobs on the other days.I've always carried insurance on my semi / dump-truck/ & trailer,but haven't had liability insurance for work with the backhoe or skid-steer (as I usually only used them around the house).I did do work for my friend this summer & fall with the Bobcat,and it worked out well for both of us,but he's pushing for me to do more,and to work with the backhoe too.He also wants me to get liability ins. in case of an accident while using them on the job.I agree,especially where the backhoes concerned,and I recently checked about the insurance with my agent.The Bobcats no problem(around $900/yr) but the insurance co. doesn't want to touch the backhoe/excavating part,saying I've no former experience.
How did you guys get insured,when you started,and are the excavating liability rates so high,that if I can find a company who'll cover me,would it be prohibitive if I'm only using it as a supplemental income? $900/yr is acceptable,but I wouldn't want to go much higher than that.Is that even in the ballpark from your experiences?Are there any Ins. Co. that specialize in this type of ins.?
Thanks for any replies.

 

[Steve Frazier]

Welcome to HeavyEquipmentForums.com!!:drinkup

Try looking in to insurance as a landscape company. The rates are fairly reasonable and should cover excavating too.

 

[Electra_Glide]

Jeff,

First off, welcome to the forum... :drinkup

I when I started out not that long ago, I was in the same situation (limited experience). In fact, I think there's an old thread floating around somewhere in here that describes all the gory details.

Like you, my "regular" agent couldn't/wouldn't touch me for my commercial liability policy. Fortunately I have a friend who is an insurance broker (not tied to any one particular company). It took a little work, but he was able to get me a $1M liability policy for excavating for about $1100/yr.

I'd start calling the independent agents, and explain your situation. I'm sure there's somebody that will write you a policy. Just be sure to be honest with whoever is going to write you a policy. While Steve is correct that "landscaping" will cover some excavation, if you're really going out to do site work, foundations, and trenching, you're not a landscaper. If you end up in a situation where you have to file a claim for something "outside" of your defined scope, they will have the right to not pay the claim. Your policy will clearly state what you're covered for and what you're not.

I look at insurance as an absolute requirement, and the cost of it is "built in" to the rate that you charge for the work you perform. Therefore, paying for it should not really be an issue.

OK, I'll climb off my soapbox now. Insurance is one of my "pet peves" when it comes to this business...

Good luck, and keep us informed about how it turns out.


Joe

 

[Jeff D.]

Thank you gentlemen,for the replies.I will "check around" with other companies,and see what's available.If I can get a policy for $1100/yr ,then I will do it.I get nervous when it comes to digging with the backhoe,after hearing many horror stories about digging up utilities and such.The skid steer may be one thing,as I've operated them since an early age,and feel confident with my abilities on them.The backhoe is another story,and I would never risk everything I have,to operate it in an unknown environment,without insurance.
The amount of $1100/yr seems reasonable,and I may be able to make that up quickly.I was afraid it would be much more than that,if available to me.

Thanks again,and I really enjoy this forum.

 

[Electra_Glide]

The amount of $1100/yr seems reasonable,and I may be able to make that up quickly.I was afraid it would be much more than that,if available to me.

Of course, I've always wondered if what I pay is too much or too little, so it might be interesting to year from some other guys as well...

Joe

 

[Steve Frazier]

Jeff, be sure to get a "mark out" for each job, and follow their guidelines. If you do this religiously and have an accident, the mark out organization assumes the liability.

 

[Orchard Ex]

and I would never risk everything I have,

If you are worried about someone coming after the house, car, kid’s college fund etc., in addition to getting insurance, you might want to look at setting up a Limited Liability Company instead of just operating as a Sole Proprietorship. I think that they are available in most states and offer some protection of your non business assets.
“Disclaimer – I’m no lawyer, and probably don’t know what I’m talking about so talk to someone in your area that does!â€.
I recently set my company up as an LLC. In Maryland it’s not hard to set up, but they get $300 per year for the “privilege†of doing business as an LLC.
YMMV
-Korey
Oh yeah - FWIW I'm paying about $1,100 year for 1/2M liability, $50k in owned equipment, $50k in leased/borrowed equipment, $10k for tools and another $10k for the "work" part of the property. Seperate policy for the truck and trailer.

 

[Jeff D.]

I've heard back today from the agency that insures the contractor that I sub for.They've given me a quote for $1mil liability/yr. ,$500,000/occurance, covering grading and site prep. I asked if this covers digging footings,digging up culverts for replacement,etc.She say's it would cover all of those,but it wouldn't be sufficient if I was planning to do septic systems,or excavating exclusively.The quote was for $552/yr.(a pleasant suprise,from what I was expecting!!)
I'm not planning on septic system jobs,and the contractor doesn't do them anyway,only remodeling,additions,and garages.So it may be sufficient.

I've tomorrow off,so I'm going to sit down with them and make sure we're on the same page,with regards to what I'd be covered for.If at a later time I'm doing more excavating,than site prep. w/skid steer,I'll have them adjust the type of insurance.

Steve,you've mentioned I should get a "mark out"on each job.Forgive me for my ignorance,but I haven't a clue what that even is?Other than the jobs I've done this summer with the Bobcat,I've no commercial experience,and on the jobs I did do the contractor(a.k.a my long time friend)basically held my hand,and showed me what exactly I needed to do.(he didn't REALLY hold my hand though)I'm fairly confident on a skid steer,o.k. on a backhoe(at best)and completely in the dark about actually running a construction co. I'm willing to sub for my friend,as long as he is willing to take me under his wing,so to speak.(and his check's don't bounce!)

I have purchased much reading material about operating a construction business,and I have until next spring to get all "learned-up" before he'll put me back to work.I'm hoping with his help,my new reading material,and forums like this,I'll have a much better understanding of what's involved.

 

[Steve Frazier]

I'm not sure of the organizations available where you are, but here we have a "Call Before You Dig" number, that triggers a mark out order for all the utilities in the area of your job site to come and mark their lines. You must give 48 hours notice before you plant to dig. If you fail to call prior to digging and have a utilities accident, you can face heavy fines in addition to the cost of repairs to whatever you've damaged.

If you have your markout, follow the limitations that the mark out company has provided as far as how close you may come to their marks and have an accident, then you are not held liable.

 

[Jeff D.]

Thanks for the advice,Orchard Ex. That is something I've thought about in the past,with my trucking business,but never have checked into it too deeply.
It may be a good time to think about it though,so one business couldn't drag down the other one with it,in a crisis situation.

My semi is "newer" (2003) and worth some money,and my trailer too, but the rest of my stuff was all bought second hand.It's older stuff(70's and 80's)but all paid for,and still has some life left in them.I might as well get some use out of them,rather than have them sitting in the barn,collecting dust.The only insurance I'm concerned about is the liability portion.I don't think the equipment would be worth the premiums for covering them for damage.

The way it's worked so far is,I find equipment that "I just can't live without",and after getting it home,and spending all my allowance replacing everything that's worn on it,I forget what I bought it to do in the first place.I then park it in the barn,and look for my next project.Doing this landscaping/site prep. side line business will give it all meaning.It also may justify my reasoning on why I should get too buy this old Allis Chalmers HD6 dozer I know needs a "good home".(someone on this site must see the logic in that!!)??

 

[Jeff D.]

Steve,we do have that here also in Minnesota.I have used them when digging on my own property,and know that they "must" be called 48hrs. prior to digging.I've discussed that with the general contractor,and he says that he'll take care of that,and acquiring all the proper permits too.

I will be double checking that they were called though,prior to sinking a tooth into the ground.Better safe than sorry!!

 

[PROCUT1]

In addition to the GC calling at least here in NY YOU MUST ALSO call for your portion of the job

 

[Jeff D.]

Procut1,I'm learning that there's MUCH to know before someone dives into this business.Owning,and being able to operate equipment is only a piece of the puzzle.

I bought some good reading material for Amazon.One of the titles was recommended by someone else on this forum(and I don't remember who too credit,but..) "Backhoe Loader Handbook",by Reinar Christian and "Excavation & Grading"by Nick Capachi and "Estimating Excavation"by Deryl Burch.

I'm only starting to delve into them.The estimating book was the most suprising to me.I NEVER would have imagined that the process of estimating was that complex,but like in trucking,I imagine the profit margins are thin,and one has to know what their bottom dollar price is to do a job,to get a bid in a competitive market.

My hats off to all of you who've had to start from nothing,and build your businesses up to what you have.If your not doing everything right,I'd think one could go under real fast.I know I've seen many guys that could steer a truck down the road,but couldn't make it when they went out on their own,because they didn't know where their money was getting wasted.

 

[dayexco]

maybe i'm not reading the responses right, or laws vary from state to state....here in south dakota, the utility owner has an 18" "fudge factor" each direction of the individual line, so you are still held responsible if you hit the line within that 3' area. my ins. guy recommends i carry what they call XCU insurance....that stands for explosion, collapse, underground....pretty spendy, any of you guys have it?

 

[Squizzy246B]

Jeff.D

Here is a few lines from my standard terms and conditions:

1) Boundary lines (if applicable) will be taken at existing survey pegs or your definition. You may wish to obtain a site survey to ensure correct boundary location. A qualified surveyor can advise you in this matter.
2) All due care will be taken with buried services, however you are responsible for any relocations or repairs required in way of retaining wall footings. You must obtain copies of service location drawings (“dial-before-you-digâ€) however be aware that previous works may have altered the ground levels or that the depth of the service may vary.
3) We will attempt at all times to reduce impact on driveways or paving as applicable but cannot guarantee against damage to same. The durability of these items is dependent on the quality of materials used and the compaction at time of original installation.