Insurance Questions

Business By dmich Updated 21 Jan 2009 , 3:38pm by cookie_fun

dmich Posted 20 Jan 2009 , 8:28pm
post #1 of 16

Hello all,
I apologize if these questions have already been answered on CC. I did a search and have been unable to find the info I need. I am doing all the research I need to do to set up a business (i.e., DBA vs. LLC vs. Corp...sigh) and have a couple of insurance questions:

1) Is there a certain insurance company that you recommend?

2) What amount are you insured to?

3) If you don't mind, could you give me a ballpark number for how much you pay.

Thanks so much for your help!

15 replies
karateka Posted 20 Jan 2009 , 10:25pm
post #2 of 16

I am insured through The Hartford, via USAA. I can't remember the coverage limits, but it's the highest one they offer.... say 100K/300K incident/aggregate? I'd have to find my paperwork.

I pay about $400 per year.

dmich Posted 20 Jan 2009 , 10:42pm
post #3 of 16

Thanks so much for that info! Anyone else?

No-goodLazyBum Posted 21 Jan 2009 , 12:20am
post #4 of 16

I carry insurance as well. Mine is through Erie Insurance. However, my insurance covers vending as well as the home bakery so I have $1 million per occurance (a bit extreme I know). I know many home bakers that do not carry any at all and it worked out fine. However, I am much more confident in my baking after carrying it.

indydebi Posted 21 Jan 2009 , 12:27am
post #5 of 16

Most venues around here require that you carry a million dollar liability policy before they let you in the door (I know one that requires 2 million). My liab is less than $500/year.

Commercial auto insurance is going to cost you about triple of what you're used to paying for personal auto insurance. Here's my example: We had a brand new pickup, my van and my jeep on a personal auto policy and it was costing us about $900/year. I moved the van and the jeep to a commercial policy and that policy alone was over $2200, just for those 2 vehicles.

The policy to cover your equipment will vary in cost based on your value and the building you're in. I have over $75,000 worth of equipment, plus have coverage on some of the (attached) work done in the shop (ductwork, the exhaust hood, fire system, etc).

As far as what company, I just called my agent and he did the legwork to get me the best deal. He put me with a company that specializes in restaurant and food industry business coverage. I actually had another agent quote it (you should shop your rates every couple of years) and the 2nd agent couldn't come close to touching my costs, let alone beating them.

I wouldn't ever contact an insurance company direct .... that's what insurance agents are for. Agents have clout with the different companies and will go to bat for you with rates and claims. You, as an individual, have zero clout with them at all. Work thru an agent .... always. (And just as a reminder, I have probably over 20 years experience working for insurance companies .... so please, work thru an agent. Always.)

dmich Posted 21 Jan 2009 , 12:31am
post #6 of 16

Thank you, Debi. I did call an agent this afternoon and he gave me a quote for $300,000 in coverage. It didn't even occur to me that venues would require a certain amount of coverage. Do you recommend that I call some local venues directly and ask for their policy on this?

indydebi Posted 21 Jan 2009 , 12:49am
post #7 of 16
Quote:
Originally Posted by dmich

Thank you, Debi. I did call an agent this afternoon and he gave me a quote for $300,000 in coverage. It didn't even occur to me that venues would require a certain amount of coverage. Do you recommend that I call some local venues directly and ask for their policy on this?




Couldn't hurt at all! Especially the ones that you're in all the time, or the ones you HOPE to be in all the time! thumbs_up.gif Ask if they need a copy of your license and if they need a certificate of insurance on file for you ... and if so, what is their requirement? Some places don't ask for this from "cake ladies". Being a caterer, I have a higher level of risk, so they pretty much always want it from me.

mixinvixen Posted 21 Jan 2009 , 12:59am
post #8 of 16

i also seached on here for threads, but it seems like alot of them were wiped out with the server crash not too long back.

on friday, i decided to start my seach for competitive quotes...one for auto, one for home, a third for auto being used commercially, and a fourth for personal liability coverage. i googled "insurance quotes" and came up with a site that would do comparisons for you. apparently the insurance business has taken a hit with the economy, because within 2 hours, i had been called by over 25 agents...even more had just sent me a quote through email without even talking to me first. moral of the story: you don't have to do much work, really...THEY'LL COME TO YOU!

you do need to go into it with an idea of what kind of coverage you need. how you do that is to determine how much in assets you have to your name, what you're willing to risk if someone got injured, how much business you plan on doing, etc. my best quote is from an agent that listened to exactly what i said i wanted, and then started putting the quote together and suggesting things...it's very important to me and my husband that this business, in no way shape or form, should put our personal assets at risk. not worth it!! so we chose a large amount of coverage. alot of times it's a no brainer, for example: it's only $10 more for $4,000,000 annual coverage than for $2,000,000. here's my exact quote:

STATE FARM FIRE AND CASUALTY COMPANY BUSINESS POLICY

basic policy deductible $1000 (minimum for this company)
business personal property $8000 (i guestimated)
loss of income-12 months- actual loss sustained
business liability, per occurance- $2,000,000
business liability, per year- maximum $4,000,000
medical payments- $5,000
_______________________

PREMIUM= $222/YR


OPTIONAL COVERAGES:
equipment breakdown amount of $8000= $30
money and securities (on/off premises), amount of $1000= $20
temp change, amount of $5000= $105
utility interruption=loss of income, amount of $10,000= $20
________________________
TOTAL ANNUAL PREMIUM, INCLUDING EXTRAS= $397/YR OR MONTHLY $33.08


YOU DO NOT HAVE TO HAVE "COMMERCIAL" COVERAGE ON YOUR AUTO, JUST BECAUSE YOU DELIVER CAKES!!! you can get coverage under "business/personal" heading...coverage that is made for insurance agents, or real estate agents, etc, who spend alot of time doing business in their own personal car. my agents also said, under the direct advise of his underwriters, that they DO NOT RECOMMEND ME BUY ANY TYPE OF BUSINESS POLICY FOR MY AUTO, UNTIL I REACH THE LEVEL OF 50% OF MY DRIVING BEING BUSINESS RELATED. if any damage is done while i'm driving, my business liability policy kicks in and covers me.

hope some of this helps!

indydebi Posted 21 Jan 2009 , 1:06am
post #9 of 16
Quote:
Originally Posted by mixinvixen

YOU DO NOT HAVE TO HAVE "COMMERCIAL" COVERAGE ON YOUR AUTO, JUST BECAUSE YOU DELIVER CAKES!!! you can get coverage under "business/personal" heading...coverage that is made for insurance agents, or real estate agents, etc, who spend alot of time doing business in their own personal car. ......




Excellent info!!

ziggytarheel Posted 21 Jan 2009 , 1:08am
post #10 of 16

Laws and rules can vary greatly by state. icon_smile.gif

dmich Posted 21 Jan 2009 , 3:18am
post #11 of 16

You guys are the BOMB! Awesome info, as always, from CC.

Sweet_Guys Posted 21 Jan 2009 , 12:31pm
post #12 of 16

Yes, please check into it...We were quoted over $600 here in Florida...Also, you may want to check with the venue(s) you're interested in going to because certain places will have very specific criteria that they want added on to the policy before they'll even look at you.

Paul & Peter

psurrette Posted 21 Jan 2009 , 12:43pm
post #13 of 16

I carry a million in coverage thru peerless insurance company. I just got my bill yesterday and it went down to 255 per year.

j-pal Posted 21 Jan 2009 , 3:17pm
post #14 of 16

Just a quick by-line... Before I had my shop, I was just an unlicensed home decorator... waiting until I was good enough, or had the time/money etc. to open a shop. I thought I would be smart and buy insurance to cover my business in case I was sued. The insurance company was really quick to sell me coverage which was very affordable.

However, a few years later, when I actually opened my shop, I was informed by my new agent that had I ever actually been sued, the insurance company would not have paid out. The fact that I was an unlicensed home decorator without HD approval, (technically operating illegally) made my coverage null and void! The original agent knew my circumstances, but he continued to collect funds from me for two years without telling me the coverage was useless. So, for any of you in the same boat, please make sure you're truly covered.

indydebi Posted 21 Jan 2009 , 3:22pm
post #15 of 16
Quote:
Originally Posted by j-pal

The original agent knew my circumstances, but he continued to collect funds from me for two years without telling me the coverage was useless. So, for any of you in the same boat, please make sure you're truly covered.




Sounds like a lawsuit for malpractice and fraud to me, if he knowling sold you insurance that was void from the git-go. This is why insurance agents carry Errors and Omissions insurance (the insurance version of malpractice insurance).

cookie_fun Posted 21 Jan 2009 , 3:38pm
post #16 of 16

I used to be an underwriter for Allstate for commercial liability. The rate is going to depend not only on how much coverage you choose, but also a lot on what building you are in. The age of the building and what the fire resistability is like. Also crime rating for your area of where you are doing business matters.

So someone in a newer strip mall that is all metal and brick is going to get a better rate than someone in an older frame building. HTH! thumbs_up.gif

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