Need some suggestions on Workers comp and insurance.

[rambo]

Here's my story.

I have a full time day job as a systems technician. It is a nice job, It pays the bills for me, my wife and two boys. It has also allowed me to start BeaverJack Tree Service 3 years ago and after 3 years in business I am really itching to leave the technician job and devote all my time to the tree service. BUT, it looks like insurance and workers comp would bury me. Up to this point I have one devoted climber besides myself. I go thru ground workers like water. Most of my jobs the three of us handle no problem.
I will be the first to admit that I have not handled insurance and workers comp for the one devoted worker well up to this point. So from this point on I am trying to make sure he is properly covered. I called about rates and I was told that my cost would be $33.00 per hundred dollars that he makes. Man that just seems like a deal breaker to me. Soooooooooooo I am looking for advice from other tree service companies on how they address their workers when it comes to workers comp and insurance? Please chime in and give a newbie some advice on how to take this company to the next level.
Thank you kindly
rambo

Also, Liability insurance for my business costs me $1200.00 per year for 2 million in coverage.

[woodmills1]

hello

first it seems to me your liability is way cheap, did you tell them it is for tree removal? Mine is $850 for a million, with out tree removal and no employees


second as for workmens comp, you need to pony up, you will feel bad enough if someone gets hurt, and just plain horrible if they are not covered


as I said I work alone for that reason

[Meadows Miller]

Gday

First off Ill say Welcome to The Forum and congrats on taking the plunge into the timber business Rambo  ;) ;D 8) With the insurance the 33%loading for work cover insurance is not a bad figure and is pretty much the norm you just have to price the ad on costs into the job here we also have to pay 12% Super as well for their retirement too  ;) I also pay about $2k pa for 2 million Liability cover like Woodmills said its better to have it than not  ;) I myself have gone about as far as I can without having people on the books and doing everything Myself   but times are changing to where I think its better just to put the people I need on n just get stuck into it Mate  ;)

Regards Chris

[ArborJake]

 You have to have workers comp if you have employee's. Thats pretty much all there is to it. The cost of a man to live without being able to work is enormous. With out it , if a serious accident occurs. You'll lose everything you have, the homeowners insurance will have to pay and the injured may still not have enough for medical bills plus cost of living. So calculate it into your hourly rate and that's what it cost to do buisiness. If it were easy everyone would do it. ;)

[macpower]

rambo, maybe I can help put that in perspective. My company employs 2 full time and 2 part time. Power equipment business w/ repairs and sales. We do about a 300k gross, I drop over 12k on insurance per year. Granted, this is the whole package including inventory, comp, trucks and trailers etc. With the workers comp it is just a matter of time before someone will need it. I don't know the laws in your state, but I would bet that if you don't have the coverage, any claim could be coming out of your pocket. Even a quick ER visit for stitches can run into the thousands. It's sort of a pay to play, one way or the other.
Insurance is a cost of doing business, figure it into the rates you charge. Oh, this is why legitimate businesses get real POed with the guys flying under the radar and working out of their garage, under the table, and the likes.

[rambo]

I am really glad for all or your feedback. I think I just needed to hear from those that know better than myself. I am going to be 100% legit from this point on.
Thanks all.

[ATLGA]

There has already been some good advice given. The other side of our saw mill is a tree service. WC seem high but as the other fellas already said an injury would hurt not just your pocket book but your family as well. Your family would lose everything just like an injured employee.
On the technical side your WC application was probably submitted to your states WC "pool". This means your company hasnt had WC insurance before and therefor does not have a MOD score. http://www.componentrisk.com/mod_rating.html  <-- click for explanation of MOD. Since insurance companies dont know how well you run your business or how risky you are they wont insure you. So the state must step in and force them to take a certain number of new companies each year. This is why you get max charge for the first 3 years until you MOD score is established. ... I was an Insurance Broker before I became a lumber man.  8)

[lumberjack48]

I had no insurance when i got hurt, i live on $1000. a month, the wife has to clean houses to make it. [ We live month to month ] So make sure you have good insurance, i was 41 when i got hurt. Its going to be rough for a while, the wife was to have surgery on her hand and foot this week, she'll be down for a good month.

[Kansas]

Concerning the workers comp. Check with different agents, even though as stated, you will get under state assigned insurance. There are a whole lot of different classifications. As a tree trimmer, that would be expensive. As a yard maintainence worker, it would be considerably less. We have our workers split out over several categories. But if your tree climber ever grabs limbs and loads them, or rakes a yard after the tree is dropped, he belongs in a totally different category. At least for some of his labor. There are ways around some things. But yes, you need workers comp for him. And different ways to work the system.

[69gp]

Hi Rambo

Just some info on the workers comp you might want to check out. I am an electrical contractor and as many other incorporated businesses I always had to pay 50% upfront based on my previous years payroll and the balance in payments over 7 months. In my case I was putting up over $45,000.00 at the start of my fiscal year.

I use Quick Books Pro for for my accounting and payroll. They have a program setup with the Hartford Insurance company for workers comp that lets you pay the following week for what the payroll was for that time frame. There was a onetime setup fee of $350.00 to get enrolled into their program. What is nice is that there is no more large amount of money to come up with. Also my new rate with them was 60% less then my old carrier so I am saving on that end to.

Steve