Do I really need insurance?

[Good Feller]

I'd like to share my business ideas and then see if I really need general liability insurance.  I found a $1,000,000 plan for about $72 bucks a month. 

Well, ever since I graduated from Iowa State with a degree in forestry and found out that finding a good forestry job in Iowa is impossible.... I decided to make my own work.  I started a side forest consulting business a couple months ago.  I live in Southern Iowa where there is a lot more timber.  

Anyways,,, I bought a new truck, trailer, and a four wheeler to assist with the business.  Also a ton of other smaller stuff. I've got three saws: from a 14" poulan to a MS 460.  I also bought an HT131 stihl chainsaw.

What I will be doing is:
Timber sale preparation/administration
Timber stand improvement
Selling firewood
Tree felling/trimming   (according to the arborists I won't get any jobs because my work is limited to 15ft. and below and that is what most dads and sons are for)))  Although I don't know too many people that own an HT 131,,, so I think I might have an edge although I see their point.  Also, I'm good at directional felling
 
Stump grinding  Haven't got a stumper yet but I work at Vermeer and I can get a 10% discount on new stump grinders.  Thinking hard about getting one. 

So what do you think?  Do I need the insurance just starting out???  I know that I have to have it to get my commercial pesticide license in Iowa. (to put herbicide on stumps during TSI).    As long as you tell the person you are doing work for that you don't have it or include a waiver in the contract. 

Other than that remember this is a "side business"  I have a full-time job already. I don't really know how big of demand there will be.  I don't want to buy a years worth of insurance and then not have any jobs come my way...  I suppose it's all a risk.      

[Roxie]

You mentioned owning:

a new truck, trailer, and a four wheeler to assist with the business.  Also a ton of other smaller stuff. I've got three saws: from a 14" poulan to a MS 460.  I also bought an HT131 stihl chainsaw on a stick. 

You risk losing these items at a forced sale if you have an incident and a decision against you.  Also your home, if you own that. 

Get the insurance. 

[DanG]

I would definitely get the insurance, GF.  If you intend to be active at all, just being able to say you have it will get you more jobs.  Besides, no matter how Good of a Feller you are, things can and will go wrong sometimes.

I would go for the pesticide license, also.  Again, having it will get you jobs you wouldn't get without it.  I read the other thread about the flak you're getting from some other arborists, and I think you can make it despite what they are saying.  However, you are starting out with somewhat of a handicap by not being able to handle the high work, so adding the things you CAN do will help to mitigate that somewhat.  Your degree in Forestry will help a lot, too.  That is something that few of your competitors can boast of.

[timberfaller390]

GET THE INSURANCE PERIOD. I no longer do any kind of residential tree work because I had the wind took out of my sails so to speak about a year ago. I didn't thing there was a tree out there that I couldn't put exactly where I wanted it but a 14" DBH hickory proved me wrong. It was dead but didn't look rotten but the heart was and when I set a wedge the hinge broke and it fell right square on the guy's house. Luckily it was a good friend of mine and I wasn't charging him so his home owners policy covered it. It doesn't matter what kind of waiver or hold harmless form the client signs it's not worth a fiddler's DanG if the judge says it ain't when you get sued (I'm lucky I didn't) and what if you fall a tree that hits the power line's or a neighbors fence? They haven't signed any waivers for you. I say if you are going to do that kind of work then jump in with both feet and good luck with it BUT COVER YOUR BUTT I can't stress that enough.

[Don P]

I agree, get insured.
I'm a builder but not a bad tree faller. I call in a pro near any structure just because they are insured. I know what it will look like if I end up in court for dropping one on a house.

We've had a yahoo working in a neighborhood that I've been working in. I sawed up a tree he had dropped right beside a barn over the weekend. It had a split part way up, he about high chaired it. He bounced one off a house this past winter. It's only a matter of time before his luck runs out. I've informed all these homeowners not to ever hire him for this type of work again unless they want to see his death on their property. I got off topic there, but insurance shows professionalism.

[Rocky_J]

Yes, get insurance. But first you have to figure out what business you're going to be in. You mentioned everything from pesticides to stump grinding, and they all will take you in different directions and require different equipment and skills. If you're going to buy a $25K stump grinder from Vermeer, it won't make you any money using it once or twice a month. If you're going to go into pest control, you can't really address that if you're out grinding stumps.

Or if you're going to be a 'Jack of all trades' then you might want to shop for good deals on used equipment. It's tough making big payments on a rig you only use once every week or two.

The other thing to consider is how your clients might differentiate between you and the 'yahoo' to which you refer. Sounds like he's a part-timer as well. How is he any different than you?

[Good Feller]

I'll probably end up getting the insurance...  just so I can sleep better at night.  I figure if I sell a couple loads of firewood a month, that will pay for it.  Am I going to find a policy to cover all those services cheaper than $72/ month?  What I'm getting at is I'm tired of shopping around.  I'm tired of screwing around getting this business started... I'm ready to do some work.  

One other thing I forgot to mention, I formed an LLC because I have a lot of personal assets...  I almost own my home out right.  The way I understand it is, as long as I follow the LLC rules,,,, like don't use business assets for personal use,,, the LLC will protect all of my personal assets (the home, truck, etc) encase I'm sued.  As long as I don't put too many assets into my business they can sue all they want and there isn't much they can get from me if they win.  Any truth to that?

On a side note,,, I purchased my truck with my personal bank account and put it on a personal insurance policy,,, not commercial.  It's my only vehicle and I figured I'd use it more for on the personal side of things than business,,, as of right now anyways.  Is that how you guys would have done it?  The 4 wheeler and trailer were purchased with a business check and put on a business insurance policy.  The 4 wheeler,trailer and HT 131 are the only assets I've purchased with business checks.  

[beenthere]

I carry $1 mil liability just for my protection on my property (from someone getting injured). If I was doing business on someone else's property, I'd not go less than $3 mil.

But, each have to make that decision as to what to risk.

Too many sue-happy lawyers out there.

[Good Feller]

Rocky J,,
The things I mentioned are the things I'm good at...  I figure if I offer a variety I'll have a better chance of having a constant flow of work (when one areas slow maybe another will pick up).  
As for the stump grinder,,, I can get a new SC252 for about $12,000.  I see used ones in the $6K to $7K all the time.  I'm leary about buying used stuff as I'm not a good mechanic.  I'm holding off on the purchase of this until I can get a better feel for how much of a need there will actually be.  

[Don P]

A good lawyer can open any safe and empty it's contents, that's what they're hired for. The trick is to satisfy their client before they get there. Like anyone else they are lazy. They'd rather just file against an insurance company than come after your LLC. But if you dump a load of firewood on a million dollar coon hound they'll get behind the corp, that's what the insurance is for.

In my business it's tempting to hire under the table and alot of guys do it. If one of those workers gets hurt a horspittal lawyer could come after my assets but he might look at the brand new half million dollar house of my clients too. That is a risk I won't put my clients through, something to think about as you grow.

[timberfaller390]

It's just not worth the risk to do this kind of work without insurance. If you were independently wealthy and could pay cash for damages I'd say go for it but if you were independently wealthy you wouldn't be trying to cut trees for a living. Just out of curiosity What is your previous chainsaw/arborist training? because it kinda seems like you have jumped into an industry without alot of expierence, other than a degree in forestry, I assume this because of your statement "I graduated from Iowa state with a degree in forestry THEN found out that finding a good forestry job in Iowa is next to impossible" I gather from that that you majored in forestry without any prior expierence in the industry or much knowledge of what kind of jobs would be available upon your graduation. This may all be speculation on my part and I'm not holding any of that against you or saying you can't do this because you can and I wish you the best of luck with it.

[Good Feller]

Timberfaller,

I went to school for Forestry because it was the only thing that interested me, even though there is a serious lack of jobs here in Iowa.  I'm the outdoor type and I'm a hardworker.  Unlike a lot of the foresters I went to school with I can pick up a saw and operate it.  I always thought that gave me an edge.  I've been running saws for over 10 years,,, my family owns 40 acres of oak timber around their house and I've done all the tree work for them.  There's never been a time when a situation came up that I thought our only option was to call in an expensive tree service.   Other than that, I've read a lot of books and researched a lot on the topic.  I also took the Game of logging course.    

[timberfaller390]

Good that's what I wanted to hear. Since you do have expierence especially game of logging you shouldn't have any trouble getting a good name for yourself. Sorry for my misinterpritation of your original post.

[beenthere]

Good Feller
Do wish you the best in your endeavors..

Keep making plans, and airing them out here. Lots of experience to draw from. 

[Kevin]

You might be able to write some of that insurance off through your business taxes.

[solodan]

Yes, you can write it off. Get the insurance, especially if you can get it that cheap. You will get more work if you are insured , because you appear to be more professional. Make sure your vehicles are covered under a commercial policy, This is often overlooked by small business owners, and yes it costs more, but if your truck rolls down a hill and through a house, your regular auto insurance will try not to pay. One extra job could easily pay for the whole year.

[thecfarm]

Two things you need,insurance and a GOOD accountant.Can't really run a small business without either.An accountant will cost a little,but they should save you ALOT.

[Good Feller]

Well I did it.  I coughed up the cash for the insurance....  Atleast I'll be able to sleep better at night.  My sister is an accountant,,, guess I got lucky there! 

[Jeff]

Good Feller, If you haven't actually bought the insurance yet, call the fellow below. The Forestry Forum is in the Process of trying to bring together insurance opportunities for its members and we will be working with David.  I trust him implicitly.

David L. Kurtis
IEUTER INSURANCE GROUP
233 E. Larkin Street
Midland, Michigan 48640
 
Office: 989.835.6701
Fax:  989.835.2964


Anyone that needs insurance in regards to their mil business, Just tell David that the Forestry Forum has referred you and he can help.

[woodmills1]

You don't need insurance
Till......ya need it
So.............glad to hear you got it
next year get more
unless you don't own anything

[cheyenne]

With over 50 yrs. in business here's the best advice I can give. The best Corporate Attorney money can buy. The best CPA money can buy. The best Insurance money can buy. Hire the best people & give them the finest tools money can buy & let them do their jobs. Concentrate on one thing & do it better than anyone else & you'll be successful. Don't get into price wars, it's not worth it. Most important (have fun) doing it. I wish you all the best. Cheyenne

[NewEnglandTreeSvc]

You mentioned owning:

a new truck, trailer, and a four wheeler to assist with the business.  Also a ton of other smaller stuff. I've got three saws: from a 14" poulan to a MS 460.  I also bought an HT131 stihl chainsaw on a stick. 

You risk losing these items at a forced sale if you have an incident and a decision against you.  Also your home, if you own that. 

Get the insurance. 

Ditto!

[Splinter]

Cheyenne,

Ya had to show you were from Warrensburg didn't you.
I'll be thinking about counter cheese and Bratwurst from Oscar's now.
Just finished the cheese from our last trip up there.


D

[rebocardo]

> Tree felling
> I'm good at directional felling

imho, With or without insurance you should not drop trees around houses without using safety/anchor ropes. Myself, I use steel cables.

> trimming ... I won't get any jobs because my work is limited to 15ft.

I do not do trimming, when people call for just that I tell them I trim trees by dropping them and do it on the ground.

On the other hand, I have trimmed trees once I am on the job when the home owner has asked to have branches taken care of over the garage, over their roof, everything trimmed away from the gutters, etc. Some when they look around the new open space, then decide they want a few branches off this or that tree to open up their view more from a window or porch. Or ones hanging over a fence line.

Plus, pole saws make excellent brush clearers when you have to hack your way through wild roses (or whatever they are called).

You will not get trimming work if you do not have a pole saw. Now that you have it, use it :-)

If you have the cash, get the insurance. Just make plans to never use it.

[Sawyerfortyish]

You said you have became a LLC. Good luck there. We were an LLC (were not anymore)until we found out that you become an employee of your corperation and by law must carry workmens comp on yourself and if hurt you can't use it. Just ask your insurance agent but beware you may open a can of expensive worms.
  At 70 some dollers a month for insurance thats dirt cheap. If it's any good. I wish I could get good insurance at a grand a month(I'm paying much more than that)I've had one claim since 1981. A cow got in between some logs I had skidded to a landing in a pasture and couldnt get itself turned around to get out got it's legs twisted up and broke and died. Of course it was the farmers best highest priced cow about 3 grand. Insurance didn't want to pay. So my brother asked the question what if it were a kid instead of a cow they shut up and payed the claim. But thats just one example of things that can happen that you would never think of.