Insurance to use my tractor to make money. Question?

[LDowney]

Hey guys. I recently bought a L3200 tractor to use around our property. We have about 6 acres of land and I plan on using my tractor to spread mulch, clear areas, till garden and other small jobs.

I bought a rotary cutter, auger and tiller in hopes to make a little extra money offering my services in my community. I called my insurance agent and asked him what kind of coverage I need. He said if I'm working for free in the community, I'm fully covered for liability under my homeowner's policy but he said, if I charge for my tractor services, I would need a separate commercial business policy with a million dollar liability coverage, tractor and implement coverage as well. Since I will most likely only do a hand full of jobs throughout the year, I thought it would be a few hundred dollars. His quote came back today at over $700.

I doubt in a years time I would do $700 worth of bush hogging, auger work and tilling to even pay for this policy. My question is, is there a simpler policy that just covers me for liability? I live in North Carolina.

Any suggestions would be greatly appreciated.

 

[85Hokie]

never get paid for you work........

you could ask for payment of diesel fuel.....

then again - you could ask for donations.....

never accept checks, if someone wants to pay you fifty bucks for 5 gallons of diesel, make sure it is cash only.

 

[hodge]

never get paid for you work........

you could ask for payment of diesel fuel.....

then again - you could ask for donations.....

never accept checks, if someone want to pay you fifty bucks for 5 gallons of diesel, make sure it is cash only.

My thoughts, too.

 

[LDowney]

I just called Travelers directly. I'm sure my agent won't like that but anyway, I spoke to an underwriter. He told me since farming isn't my primary employment and I would only be doing paid jobs here and there, all I need is to add an "Incidental Farming Endorsement" to my homeowners policy. This would provide me with $500k liability insurance and medical payments if someone gets hurt while I'm working on their land, including myself. This endorsement cost me $46 per year added to my homeowners policy.

Does anyone else have Travelers Insurance or have added the incidental farming endosement to their homeowners policy for this type occasional work?

I think this was the answer I was looking for. $46 a year. Should I be surprised my agent tried to sell me a full commercial business policy for more than $700 a year earlier today???

 

[skeets]

OHHH just for shyts and giggles I would call your agent and tell him what you just found out!!! And the listen to him squirm whine sing and dance and see how it takes for him to call you back and say,,,ya know I pulled a lot of strings for you,, next to lawyers I have no use for insurance agents,,
nothing personal boys

 

[85Hokie]

"next to lawyers "......sorry Skeets.....aint nutting worse than lawyers....

but wait -

WHO is running for president in Nov'16.......o dear god - I love lawyers!!

 

[L4740]

aint nutting worse than lawyers....

That is until you need one.

 

[olthumpa]

"...aint nutting worse than lawyers....

They don't call them criminal lawyers for nothing! ! !

 

[L4740]

Been there done that. Even thought of starting my own little landscaping business. Until I found out liability insurance would be $900/year. As far as cash only goes, if you are invloved in any accident going to or coming from your cash only job, your inssurance won't cover you. I use to blow snow for three of my neighbors on a regular basis until my insurance man told me that if a car hits you on the road, you have no insurance on your tractor since you are not using it for ag use. Nice. So I still help them out once in awhile if they call me, but I no longer do it on a regular basis. It sucks. But that's the world we are living in today.

 

[D2Cat]

Yep, I'd call your high quote agent. But I'd play it cool. Remember Columbo, the detective?

I'd start off with, "I was thinking about your quote and when I told my wife she was really surprised. She suggested I call another insurance co. Maybe all our insurance is high and maybe we need to switch. But I decided to call ______(who ever you called) to see what they would say. Here's what I found out.......... Do you have any idea why there would be such a difference?"

When he's done squirming, ask him to review all you insurance! Just to make sure it's in line!

 

[Daren Todd]

OHHH just for shyts and giggles I would call your agent and tell him what you just found out!!! And the listen to him squirm whine sing and dance and see how it takes for him to call you back and say,,,ya know I pulled a lot of strings for you,, next to lawyers I have no use for insurance agents,,
nothing personal boys

That was my thought too. I would have been on the phone with my agent asking if I needed to switch to a different agent or company.

 

[North Idaho Wolfman]

LDowney,
Let me give you another side of the story.
Your insurance agent might be trying to save you some major legal problems down the line.
If you have a million in liability coverage you can not be sued my someone personally.
All it takes is one slight boo boo to give you years of grief.
I'm not a fan of Insurance or I should say the price of it, but when doing jobs, it always pays to be covered.

 

[Tooljunkie]

Up here you can license the tractor, for liability. Bisiness unsurance for a case like this means you need to do enough to justify insurance. Operating as a business has benefits too.

I think your broker just didnt dig deep enough. Simply wasnt aware of it.

I can sell a set of cheap brake pads for 30 bucks, but the 100 dollar set will outlast and outperform the cheaper ones.

Insurance is a necessary evil if you ask me.

 

[William1]

Not personally knowing all the details, but having dealt with too many insurance agents and brokers over the years, I can say one thing with complete assurance. Being a broker is a sales commission based business. The more expensive the policy, the greater the commission.

I lived in Northern New Jersey for a long time. Paid a lot for car insurance. Had a friend who was a broker for State Farm and he told me a fair policy (max coverage) was about $500 year when I was in my 30's. I had been paying close to a grand. He explained that the broker probably made 1/2 of that extra $500!
Time goes by, my policy is now about $400 (I got older somehow). I moved to Penn. Broker quotes me $3,000!!!!! In a not polite way I told him where he could put it and that my policy in NJ had been $400 an that is what I expected to pay here. He grumbled but agreed.

No offense to those of you that are brokers but some agents take every opportunity to bend a customer over a log. This is why all the commercials on TV tout being able to possibly save you $500.

Either you do work for free and accept a gift (totally unrelated to the work you did ) or you be a business, incorporate , get insurance, files taxes. If you work for free and have an 'incident', the incident never happened during the job.

 

[Humblebub]

William1 you may think you speak with certainty but you are simply wrong. Some brokers receive commission. Some have employers who receive commission. Most, and probably all, insurance firms receive a commission and that is how they keep the doors open. I just retired as a broker and in 45 years I never received commission. My employer did receive a commission. On a $1,000 policy my employer received from $90 to $200 depending on the line of insurance.

Just remember, there are many direct channels to buy insurance where you bypass the broker. If you feel confident that you know what you are buying you have no need for a broker.

It you really encountered a broker that was gouging the sorts of dollars you are quoting then that person should be reported to the regulator in your jurisdiction.

 

[OldeEnglish]

LD,

If you think that you won't do $700 in a year doing small jobs, I believe you will realize it's not worth the effort doing. All those jobs will put wear and tear on your equipment which will cost you more in the long run. Just doing service from the added hrs will cost you a significant amount. Helping out a friend or two is one thing, but trying to turn a profit on even a $1000 a year worth of work will be next to impossible never mind adding insurance costs into the game. You could probably grow and sell vegetables on the weekends and make more money with less wear and tear on your tractor.

 

[William1]

William1 you may think you speak with certainty but you are simply wrong. Some brokers receive commission. Some have employers who receive commission. Most, and probably all, insurance firms receive a commission and that is how they keep the doors open. I just retired as a broker and in 45 years I never received commission. My employer did receive a commission. On a $1,000 policy my employer received from $90 to $200 depending on the line of insurance.

Just remember, there are many direct channels to buy insurance where you bypass the broker. If you feel confident that you know what you are buying you have no need for a broker.

It you really encountered a broker that was gouging the sorts of dollars you are quoting then that person should be reported to the regulator in your jurisdiction.

Canada is not the US.

Most 'independent agents' live off of the commissions. A percentage of annual premium are paid to the broker. This is what makes a broker/business have value. When one retires, he sells off his account portfolio that each years, earns a percentage of the premiums.

You worked as an employee for the broker (perhaps in Canada they are called 'firms', IDK). You got maybe a cut of the new business and nothing for policy renewals. You also got a salary for dealing with the customers. Your employer got a percentage of annual premuims every year the policy was active, which some of which is used to pay your salary. Really no different from a car dealership where salespersons get a base salary and a commission on the sale of each car. The dealership owner gets all that plus a cut of the service, parts and all volume rebates.


Note above the part I underlined. It is counter intuitive.

 

[Kurtee]

As someone who has done jobs for people for years I will add my input. I have done mowing, tilling and other yard work for years. Much of this time without coverage due to the fact that the operation did not generate enough cash to pay an insurance policy. I had talked to my State Farm agent several times and gotten quotes from other insurance companies. There were no endorsements or anything like that available. Finally State Farm was able to write a contractors policy to suit my needs for about $800 per year. This also included an inland marine policy. I will not cover anything underground. If I want to get into this area I will need to find another policy. You are talking tractor loader work. Is this underground? You decide. I know of a contractor who started up and was into landscaping. He did some digging and hit a large fiber optic cable. No insurance! It will take him a long time to pay that bill. In todays world you need to CYA. You are either in the game or out. Good luck in your pursuits.

Kurtee

 

[D2Cat]

If this is the situation, " He did some digging and hit a large fiber optic cable. No insurance! It will take him a long time to pay that bill." you friend will probably NEVER pay that bill. He will file bankruptcy, and start over, maybe living under a bridge.

Contractor will be charged for repairs (at a rate you can't imagine!) and for business lost to providers while down.

 

[William1]

If this is the situation, " He did some digging and hit a large fiber optic cable. No insurance! It will take him a long time to pay that bill." you friend will probably NEVER pay that bill. He will file bankruptcy, and start over, maybe living under a bridge.

Contractor will be charged for repairs (at a rate you can't imagine!) and for business lost to providers while down.

Even then, unless you called (possibly varies around the country) call811.com/ and had all lines marked, you will be up the proverbial creek.
A lot of contractors I know that work in an area that 'might' have any major lines, not only have the 811 guys comes but they also have an independent company check. These guys not only do a signal trace but check all county records and supply a platt that shows all buried lines for a large radius in the area. Then they send notification of the dig to those companies and request verification and indemnification. Big business in Northern VA where much of the nations fiber lines converge.