PDA

View Full Version : Another insurance adventure


Mick
05-23-2004, 08:06 AM
I thought someone might be interested in this or at least find it amusing:

I’ve had my General Liability policy through the same company since I started plowing snow in 2000. Basically a $300,000 policy for Residential only. I had clarified this to be for driveways and private roads, only. Then a couple years ago, I got a chance to bid on a public school. I didn’t get the school, but after some sweating, the Underwriter decided the school would be covered, along with anything in this area besides hospitals or large malls. Since I was also limited in scope of operations to 25 miles from my “base of operations”, this was a moot point, anyway.

Since then, the mileage limitation has been removed and I clarified that I was covered anywhere in the United States.

I got a ruling that I would be covered for the Library, which is a private concern and in a rural setting.

There was never any contention that I would be covered for Municipal work, which would cover any streets, roads or government offices.

There have been no claims, either to the GL or Commercial Vehicle.

Since I retired in November, I am wanting to expand and this has led to several contacts with the insurance agent for several adjustments my policy. First was to increase the coverage amount, which is no problem - just add money. Second was to expand include businesses (Retail). This is where it got tricky and then amusing.

When I stopped into the window glass repair store, the owner asked if I’d be interested in plowing and sanding for him next winter. I then contacted the insurance agent to have Retail added to the policy. She indicated that this would likely increase the policy significantly - 2x or 3x the current rate. The worst was that she said the Underwriter might not want to rewrite the policy at all - just for inquiring about retail - and if they did, they’d want a statement that I wasn’t plowing anything involving public access. I still wanted to find out (how else was I going to know for sure) and just sweated for the next few days. Then I got the following from the agent who had contacted the Underwriter. In “” are direct quotes from the letter:
“I have obtained the following information from” (the Underwriter) “regarding your snowplowing operations.”
“1.Your current liability policy will allow Residential & Retail plowing. As long as number of retail plowing jobs is less than the residential plowing jobs.”
“2. Your current liability policy will not allow any plowing jobs for municipalities. (schools, towns, cities, etc)”

It goes on with other business we’d discussed. Notice that schools, which had specifically been addressed two years ago, are no longer allowed.

I think the main point is when people come here and ask about insurance, they need to discuss their needs with the agent, get specific rulings from the Underwriter rather than the agent, review the policy often as conditions seem to change without notice and GET IT IN WRITING. I hadn’t even tried getting the few retail jobs in this area because I’d “understood” this would need to be added to the policy and would cost about twice my current rate.

cat320
05-23-2004, 08:24 AM
I hate insurance co. They are the bigest waste of money but be still have to have them just in case for the sue happy people out there and so forth.
Mick I really don't under stand this "1.Your current liability policy will allow Residential & Retail plowing. As long as number of retail plowing jobs is less than the residential plowing jobs.”

So if you get more retail than residential you will no longer be covered? maybe I'm not understaning it the right way.

Mick are your trucks reg. commercial or residential?

snonut12
05-23-2004, 10:06 AM
Also another interesting part is that there is no limitation as how many accounts you can have. For example, you could be covered for plowing 5 residentials and 4 retails, but you also could be covered for plowing 50 residentials and 40 retails too, right? (Yeah I know it would be a bit difficult to accomish all of them by yourself, but just setting an example). Just as long as the numbers of residential accounts are higher than retails that you have, which is clearly stated on your policy. It just don't make sense, but it could be an advantage to you in a way or vice versa.

Mick
05-23-2004, 11:04 AM
Originally posted by cat320
Mick I really don't under stand this "1.Your current liability policy will allow Residential & Retail plowing. As long as number of retail plowing jobs is less than the residential plowing jobs.”

So if you get more retail than residential you will no longer be covered? maybe I'm not understaning it the right way.

Mick are your trucks reg. commercial or residential?

My 3500 is registered as a commercial vehicle. The 1/2 ton is just regular registration. I think there may be a difference in state registration laws, but I can't register the 1/2 ton as commercial (unless I'm a farmer) and the 3500 can only be registered commercial.

What that quote is refering to is the number of residential vs number of retail accounts. Stephen is right, the only thing that they look at is the number of each that I am plowing (4 vs 5 or 40 vs 50 doesn't matter). If the number of retail accounts exceed the number of residential accounts, they will write a different type of policy. Right now the policy specifies "Residential"; it would change to read "Retail" and the premium would go up.

Mick
05-23-2004, 11:22 AM
while we're examing aspents of General Liability, this may also be pertinent. Now, to me at least, this was really confusing. But the agent explained that any General Liability insurance applies to ANYTHING I DO not just what is listed on the policy. The way it works is this:

I have informed the insurer what I do and they have agreed to insure me for that activity at a certain rate (premium). Now all is well as long as I am engaged in the activity(ies) listed. The problem comes in when I perform a function which I did not inform them about. Let's say I tell them I am plowing driveways and I plow a retail store. A customer sues for damages from a fall. The store informs their lawyer that I am responsible for clearing snow and I in turn refer them to my insurance.

GENERAL LIABILITY WILL PROTECT YOU IN ANY CIRCUMSTANCE.

The insurance company will pay the claim, but because they had not agreed to that "level of risk exposure" they will cancel your policy. You will likely not be able to secure insurance with any other company since your policy was cancelled for cause. Your GL insurance is cancelled, you are unable to secure General Liability insurance from any other company, there is no "risk pool" requiring any company to insure you so you are just out of business.

However, this may be different in other states.

BRL
05-23-2004, 07:33 PM
Great post Mick! Thanks for sharing. I believe the insurance laws vary greatly from state to state, just like the motor vehicle registration regulations, etc. My story is different from yours in that I have been about 95+% commercial all along. But my insurance rates, and the company's concerns have always been based on the amount of sales generated, not the amount of accounts. I find it quite interesting and actually unbelievable that they could base it on number of accounts. I took over a resi route this year for a friend who couldn't do his due to health reasons. Those dozen or so accounts didn't generate as much as most of my commercial accounts individually did per storm. It would take a hundred or more of such accounts possibly to equal the commercial revenue generated. And there was certainly much more liability exposed at any one of the commercials vs that whole resi route.

Your points about telling the insurance companies exactly what the company does probably holds true everywhere. If it doesn't say in writing that they are covering a particular activity, they probably aren't going to cover any claims that may come up for "extracurricular" activities.

digger242j
05-23-2004, 07:36 PM
“1.Your current liability policy will allow Residential & Retail plowing. As long as number of retail plowing jobs is less than the residential plowing jobs.”

So in other words you could add a 2000-space mall parking lot, drop all your residentials except for two one-car driveways, and still be ok in their eyes?

Mick
06-02-2004, 01:36 PM
Originally posted by digger242j
So in other words you could add a 2000-space mall parking lot, drop all your residentials except for two one-car driveways, and still be ok in their eyes?

That's what I understand from reading this.

Thought I'd also add - I increased my policy from $300,000 to $1million and it has "Subcontractor's" endorsement. I was kind of worried about the increase in premium. Came to $39. I think for $39 a year, it's worth it.

digger242j
06-02-2004, 05:58 PM
Insurance people must go to the same business school as the people who set airline ticket prices...

:rolleyes:

BRL
06-06-2004, 12:23 PM
"Thought I'd also add - I increased my policy from $300,000 to $1million and it has "Subcontractor's" endorsement. I was kind of worried about the increase in premium. Came to $39. I think for $39 a year, it's worth it."

That's a good point that I always try to remember to share. We see lots of discussions of people hesitating to go after certain contracts because of the insurance requirements. But the changes in premiums to change that coverage are really not that big of a burden, and it is often worth it to get that extra coverage.

amfamsam99
06-25-2004, 03:06 PM
Good afternoon, my name is Sam and I am an Agent with American Family Insurance. I have read some of your concerns and the replies you received are all true to some varrying degree. As was stated earlier, laws differ from stste to state and that can varry a policies coverage and or limitations in a minimal or drastic degree. I will try to answer anyones question to the best of my ability or at least refer you in a direction to get your question properly answered. I have several years of plowing experience and insure a multitude of snow plow companies ranging in size from 1-200 employees.
I understand the frustration people go through, but the middle of the winter in a fantastic storm is not when you want to find out what is covered and what is not, that is something that needs to be looked at now.
As I said laws do vary from one state to the next, and I am in Chicago, IL. and will help out any way I can.

T-Zab
06-26-2004, 12:51 PM
Hi Sam good to have you on board here at ********. Im north of Chicago in Beach Park (just to the north of Waukegan). Wondering were you are located ? I carry general liability for my buisness (carpentry contractor), workers comp ( choking ), and a general liability for plowing. Need to upgrade this year for full coverage for plowing. I used to sub for snow systems so that was why I just had a general liability for plowing. Anyway I plan to break out and start my own thing. If you can handle my needs or know of someone up north please feel free to pm me. Thankyou in advance.
Todd

p.s. My present agent is not the sharpest tool in the shed. lol

BRL
06-28-2004, 07:04 PM
Welcome to the site Sam! And thank you for jumping into the subject & your offer to help answer some of these questions from your perspective.

North Country
07-01-2004, 05:57 AM
I wish an agent from New York would 'step up' as Sam did. Even though NY is a tough state to get anything done, we have done well with our agent. It is great to be able to have your questions answered by someone in the field.

I can't dump a pile of salt in NYS without permits, site inspections, filing fees, a young priest and an old priest...... - michael

amfamsam99
07-01-2004, 09:46 AM
T-ZAB, We can take care of the G/L, vehicle insurance, property insurance for the snow business, and possibly the contractors depending on the scope of your carpentry business.
Feel free to call us 708 687 8770

North Country, thank you for the compliment. Helping everyone here helps my business. It keeps me up to speed in what is going on with the business and helps me in coverage issues for the future.

Sam