Buzz about sawmill insurance vs. bandsaw mill insurance

[Kelvin]

Recently my home owners insurance just dropped me out of the blue b/c i had an "uninsured" business on my property.  I told my agent that i was a contractor, but they just sent me a letter without asking any questions, or telling me what they are having trouble with.  So, i'm out looking for insurance and coming up with all sorts of trouble.  2 of the big companies around me State Farm and Farm Bureau agents asked whether i use "finishes" in my woodshop.  I said, i think most people in the world who make anything use "finishes"  Sorry, we don't insure the use of "finishes"  This makes me wonder if i promised to only use wax finish if that would work?

There has been a number of threads about insurance and sawmilling, but i'm wondering about how dangerous band mills really are.  There are probably difficult agents, but it may be coming from the top down that they don't want anymore claims no matter how much they charge.  I've been calling around to different contractor insurance agents and some are super worry warts and if you ask them any questions, like "i sell some things from my shop, what happens if people come out to buy something?"  They respond like the sky is falling.  "oh, buy things?  They could get hurt!"

I'm trying to explain to these agents that "sawmill" is not an all encompassing term.  My sawmill isn't much bigger than the 19" bandsaw in my shop.  It just goes up and down a track and cuts logs.  THey do make shop bandsaws that have a sled for cutting small logs in a woodshop, is this a "sawmill" with the same risks and liablities as a Plum Creek sawmill operation?  Basically i've tried explaining that i've been in business for about 10 years and haven't made much more than about $8k in any given year and that i'm mostly an independent contractor, but i want to play by the book and be upfront about everything i do.  What underwriter in their right mind is going to listen to anything you have to say after you say, "well, its just a small sawmill"?  I suppose the biggest liablity of a bandsaw mill is the log handling?  You don't need any special insurance in your woodshop for your bandsaw, which i don't think is a far fetched comparision.  Its not like my table saw is like a circular mill.  I mean one blade is close in size, my bandsaw will run a 1" band blade, and my mill runs a 1 1/4" bandblade while a table saw blade is 10" while a circular mill is 48"-54"

Doesn't the industry keep track of things like accidents with the use of small mills?  Wouldn't bandsaw mill manufacturs be interested in helping form an affordable sawmill insurance industry?  Couldn't they get together some accident statitics and safety information about real world use of bandsaw sawmills?  Have an attorney, or whoever could do somthing that would be recognized by insurance companies, like car crash tests.   Most people probably don't know there are differences.  From my understanding a small manual push milll like my neighbors Norwood, is a sawmill like my other neighbors circular sawmill.  Which do you think has much liablity?  Which has more potential to harm the operator? 

I tried asking what constitutes a hobby, and they said the exposure is just the same, whether i make no money or a lot, its still a sawmill.  Does anyone out there have any reasonable costing insurance?  What would you think someone would pay to cover liablity on a business venture that might someday bring in $15k, but is currently bringing in less than $10k.  $2k? 

Isn't sawmilling and logging an agricultural industry covered by the USDA?  Historically farms had sawmills right?  Did they not get coverage from their farming operation?  Why would this be different now?  Shouldn't Farm Bureau, who covers farmers around here, cover other farming related activities?

Right now i'm trying to bait the insurance agencys with covering my whole operation, house, business and cars.  Its not too much, but i figure it might be my only shot at getting something.  Another thing i don't understand is why they can't insure my other operations, say my contracting and exclude my sawmilling?  Why would they have to cancel my home insurance instead of just saying we won't cover the sawmill?  I would be fine saying i don't think my sawmill is a big exposure, just let me buy some fire insurance or something to insure it like any other expensive piece of equipment.  I don't even have people around the thing, so i'm not too worried about anyone getting hurt by it.

Boy this is frustrating!  I've called 6 or 7 local companies and just getting someone to talk with is frustrating.  An agent wouldn't begin to think of talking directly with you.  You talk with their secretary who takes all your information only to say on your message machine the next day "oh, we don't insure barns"  Augh!  Why did i spend 1/2 hour telling you my drivers license number and my wifes birthday?  I even try to get around them.  "hello, yes i'd like to get a quote on some home insurance, but would like to know can you insure wooden barns?"  "I don't know, let me get your information, then i'll ask the agent"  Augh!!!    I only get 1/2 of the people to even call back and i haven't even mentioned the woodworking business.  Then when we get into the situation they all have to talk with their underwriters who must be in siberia or something b/c it takes a week or so to hear back that they said "sawmill?"  HA, ha, ha, ha, ha, thats a good one!"  Is there any insurance company that makes their own decisions?  Who i can show what is happening?  Show the bandsaw to?  Boy, how can i take money from people who own bandsaw mills by making my own insurance?  This seems to be a good way to make money with sawmilling.  Insuring sawmills! 

I bet a lot of people would be surprised if they called their home owners insurance company and said.  "I have a small, manual push sawmill, would this pose any problem with my insurance?"  "Click"  "hello?  Hello, anybody there?"  I bet they would get a letter in the mail saying they need to get a new insurance company. 

Just wondering what the latest word is on any national company that would be reasonable for small operations in the Midwest.  I'm in michigan.  Who might someone check with?  How can i word what i'm looking for to make sure i'm actually covered, but not bring up crazy people's red flags?  Any help or ideas would be good,
Thanks
kelvin

[olyman]

in the state of iowa----farm bureau. allstate..state farm,john deere--and progressive--have no part of them--expensive--and a ripoff if claim time--i get my insurance out of state--from westfield ins co--dont rem the town--they are very reasonable---

[Kansas]

Dont bother trying and explain bandmills to insurance agents.... you will have better luck herding cats. Insurance for us was a nightmare until about 2 years ago when Pennsylvania Mutual started insuring in the state of Kansas. I dont know if it would be economically feasible for you or not, but you might try them. (I assume they operate in the state of michigan.) You have to go through an independent insurance agent to get it. They specialize in insuring sawmills, lumberyards, etc..... so you dont have to explain what a bandmill is.

[BBTom]

Canada has Woodchuck insurance, It came about when a bunch of Woodmizer owners wanted bandmill insurance.  They went directly to the underwriters, and now they have insurance. 

I know we have discussed insurance here a few times before.  Maybe we should try getting the attention of some underwriters.

If you look close enough at the trade shows, like Paul Bunyan, etc.  You might find a small insurance company that does insurance on logging and bandmills. 

[BBK]

I guess I'm pretty lucky in the fact the farming buisness has carried the insurance for the sawmill and logging. Never had a problem with the agents as Sawmilling, Logging and Barn building are listed as agricultural buisness pursiuts in the insurance industry.

Have you tried to get info on insurance underwrithers from your local soil conservation. DNR or state buisness development people? Another source could be the local chamber of commerce. Here in MD the state university has local agricultural annex services that can tap the university data centers for this type of info too.

Good Luck.

[farmerdoug]

Kelvin,

Checkout this thread.

insurance

Farmerdoug

[bull]

I have Farm Bureau insurance.... Never any questions re finishes or sawmill... everything insured  by them 2 million in liability and 100 % replacement on house, outbuildings and equipment also riders for leased and financed equipment....  Around $4000.00 a year... Previously was paying around 7500.00 per year for less coverage spread between 4 insurance companies.....

[lmbeachy]

Kelvin, not sure if they do business in Mich, but you can give them a try. Penn. Lumbermans Mutual. Phone # 215-625-9233 Lester

[ely]

all i can tell you is good luck when trying to work out an insurance policy, and even more good luck if you ever have an actual claim to file.

most insurance companies are all owned by the same holding company anyway, and last time i spoke with a lawyer he told me that was a total of about 3 big corporations. down here if you get mad at farm bureau and go to state farm you are still paying the same people.

i use farm bureau and have since 25 years ago,home ,auto and thats about it for me.

[Part_Timer]

I have farm bureau and had to get an underwriter for mine.  I had a lot of trouble before I went LLC.  Once that was done it took less than 2 weeks, we are insured for cutting here at home, customer sites as well as sawing at shows.  Also covered is replacement of the mill of stolen for damaged.  2 million for just north of $800 a year based on 10K of income.

[Kelvin]

Howdy,
Thanks for the all the replies.  I've called a bunch more places and have had the oddest conversations trying to describe what we do.  Part-timer, farm bureau for $800 sounds great!  I'll have to give them another call and see.  Maybe i'll try an agent in another town as they might be more interested in making money.  I'll call lumbermans as well.  I think that is the company a number of places have mentioned using anyhow.  Might as well go direct!
Thanks
kelvin

[fencerowphil (Phil L.)]

As usual, great thread, Kelvin.

It's great to see someone around here is more verbose than I am.
 
And that's quite a keyboard feat!
 
Phil L.

[schmism]

Ive got a simular problem.  The old farm we bought has a non-liveable farm house on it. We are in the process of donating it to the local volinteer fire dept for training to have burnt down.  But no insurance company will touch us with the house as it stands.

im currently in some grey area of the insurance world.... "what if i was building a house that was non-inhabitable"  well that would be covered under the "construction umbrella"   ok well part of constructing a new house, is destryoing the old one.  When will you be starting construction?  Oh in 3 years?  ya, construction umbrella runs for 12 months.  so that wont work.....

We set a single wide trailer on the property to live in while the old house is demolished (burnt) and we get plans together to rebuild (in the same spot).    but when we set the trailer it was 3 months before we had power permantly trenched in, septic hooked up, water trenched in etc.  For that 3 months we couldnt get insurance.  because there was no skirting and no front stairs (i hadnt built the front deck/stairs yet as i was trying to get utilities hooked up)  The bank said we can put you on our insurance.... fine we said... then we got a call from the bank saying THERE underwriter wouldnt cover it unless it was habitable (utilites hooked up)   we were like WTF! 

once it was habitable you start calling around for moblie home insurance, people think you want the structure covered and your stuff inside.  No libilty as they figure its sitting in a trailer park (you dont own the ground it sits on)  but its sititng on my private 5 acers, I NEED libility.   but then they dont cover the other buildings (barn/garage)  and they dont cover cars so i cant get a mulit-line discount (worth as much as 10-15%)

The bank insurance covers structure only... not personal property.... but i still have a house in the city im trying to sell with normal homeowners coverage.  I asked when we bought the property, if i take personal property out there, and it gets stolen, burnt, tornato comes through.... is it covered.... there response, your personal property is covered no matter were it is.

SO im in this limbo of grey area, im sorta insured, but not really?   Not to mention im on the verge of being classified as a "farm" as i have a tractor,"livestock", a barn etc.   and you toss out the world "farm" to an insurance angency like statefarm and OMG! the sky is falling!

so as others have said, seems the best approach for me is also farm bureau.

[bull]

are you using the other house as your leg residence.... The trailer may be considered as a 2nd home or camp and covered under the homeowners policy for your "legal" residence.......

Or set up the Farm under a "buisness name"  IE: "So and So Farm" and then join Farm Bureau as a Farm not individual and get the insurance you need.. It not cheap !!!

[Brucer]

Unfortunately, the Woodchuck insurance is only available in Canada. However, I do believe that if some FF members got together and approached a broker, something similar could become available in the US.

As BBTom said, it started when a group of Wood-Mizer owners approached a broker. She went to one of their meetings, saw the saws in action, checked out their safety features, talked about how the small sawyer worked, and then asked the key question -- "How many of these things are there anyway?"

This is actually the kind of market the insurance companies love. It's very well defined, so they can predict their claims payouts pretty accurately.

Even though the Woodchuck program started with WM mills, they quickly expanded it to include the other major portable sawmill brands.

So, get a bunch of fellow sawyers together, all in one region, all with the same type of mill, and find a broker. Get them to actually look at the mills in action. Have some numbers ready -- here's how many brand X mills in this state, here's how many brand Y mills, and so on. Refer 'em to the folks in Canada.

[stumpy]

It's simple, Insurance companies irst determine if there is any risk in what you want to insure.  If not, then they will insure you.  If there is any risk, they won't insure you.

[Dan_Shade]

if there's no risk, why have insurance?  insurance companies are one of my pet peeves, but i guess if I ever need a claim, i'll be glad I have it.

[DR_Buck]

Dan Shade

insurance companies are one of my pet peeves, but i guess if I ever need a claim, I'll be glad I have it.

                   What he said !   
My Farm Bureau agent won't  touch the sawmill side of the farm business.    They cover all the farm activities, house, out buildings, livestock and my vehicles.  But not the sawmill or related activities.   There's a company out of West Chester PA that will sell sawmill insurance that covers the mill.  Not the milling activities.  No liability!

I have my sawmill business and all the mill equipment including my log trailer and loader covered by Burns & Wilcox-Scottsdale out of Baltimore.  It's a commercial package that has $2,000,000 liability, personal injury, medical and full replacement for my equipment loss by fire, theft etc.  I have no employees (this is key).  The coverage runs just over $1200 a year.

I don't know what other states Burns & Wilcox provide coverage in.  My agent is located in Locust Grove VA.  Anyone interested in contact information can PM me and I'll provide the name & phone number.

[Brucer]

Actually, what insurance companies do is assess the risk, estimate how much they will have to pay out in claims, and then set the premiums to exactly cover the claims.

So how do they make any money, you ask? Simple -- think of the insurance company as holding onto the clients' money (premiums) in trust, and then redistributing it to those who desperately need it (claims). All the time they're holding onto the money, it generates interest.

The real problem is that insurance companies want to be sure they have the risks -- and resulting costs -- figured out accurately. If they don't, they could take a major loss. When they aren't sure they add a major safety factor onto their premiums.

Insurance companies love well-defined, moderately large, low-risk markets. They don't want to deal with one-off situations, even if they're perceived to be low-risk, because they're only collecting the one premium. No matter how small the odds of a claim, if a claim is made it will never be offset by that one premium.

[wls]

So do I need insuance, I'm getting a mill, cutting only for my own use. I could see maybe insurance for theft etc.