Insurance is a P I T A

[fresh]

We recently switched our business from a partnership LLC to an S-corp. The headache of not having a paycheck to verify income was getting to be way too much, but now I feel like I made a big mistake.

I called my insurance agent to make the switch, and he needs to write a new policy. I had inquired about adding a rider to cover vehicles left on our property overnight (or whenever) and that prompted him to change our classification code, resulting in a policy that is literally 5x more expensive. We are in NJ, currently with State Farm, and the only classification that they can find that will work is the same one for AUTO REPAIR SHOPS. So our generally liability insurance, with pretty basic coverage, is 4.5% of our annual sales. That seems insane. Also, since we switched to INC, we are considered a brand new company and don't get the benefit of 12 years in business or however many years we've been using our insurance agent.

And don't get me started on workman's comp. I had it before, but we didn't have employees last year, so i canceled it. Now i'm trying to get it reinstated and its so annoying. I got a quote from a different company who also "doesn't insure sign companies, but can offer us a policy at a rate of 35% of salary, with a $10K down payment."

So, anyway, do you know what your classification codes are? We make and install vinyl signs, dimensional lettering, vehicle wraps/lettering. The standard stuff, no electrical, no crane work, we don't even have a bucket truck. We only install jobs that we can reach with our ladder. AND if you're in NJ and like your insurance agent, i'd love to call them for a quote.

thanks!

 

[Texas_Signmaker]

Classified? I checked my insurance that I have through The Hartford and it just says" Those usual to the insured's business" I think I pay like $90/mo and I'm just a one man show doing about the same as you with the exception of renting buckets. Maybe call them and bypass the agent.. local agents around here were having a hard time insuring a "sign company" and when they did it was crazy high.

 

[ProColorGraphics]

I would find a non-captive agent who can search multiple companies for quotes. I have West Bend Mutual and they have been great.

 

[gnemmas]

For workers comp, if you only have two shareholders, with minimum of 15% ownership, you can opt out of coverage. That is the most rip off scheme by the insurance companies and some workers..

Health insurance covers injuries or illness regardless how or where it happened. So Workers Compensation insurance should just cover the "Compensation" for loss of wages. Thus a disability or loss of earning insurance will surfice.

 

[Texas_Signmaker]

For workers comp, if you only have two shareholders, with minimum of 15% ownership, you can opt out of coverage. That is the most rip off scheme by the insurance companies and some workers..

Health insurance covers injuries or illness regardless how or where it happened. So Workers Compensation insurance should just cover the "Compensation" for loss of wages. Thus a disability or loss of earning insurance will surfice.

Rip-Off?
What if an employee doesn't have health insurance and got hurt at work? Maybe the work environment was unsafe and employer was negligent in the accident. The injured worker needs that coverage to pay for the medical expenses. The employer wants that protection so they are not responsible for 1 million dollars in medical bills.

 

[equippaint]

Why didn't you just change your filing status with the IRS to an LLC-S corp?
It sounds like there may be a disconnect between you, your agent and whoever she is getting to quote your policy. You have to be real specific with agents, tell them we do installs but do not use boom lifts or bucket trucks, we do not do electrical, we dont drive any customer vehicles, they stay on our lot at all times etc. Garage liability policies and garage keepers usually include coverage for you driving non-owned autos. Be clear with them that you will never drive a customers vehicle. We have 1 mil garage liability with dealer plates and pay around $6k/year in Florida. Customers should also have coverage on their vehicles in case of theft or if their car catches on fire in your shop and burns your place down through no fault of your own.

 

[gnemmas]

Ask State Farm agent if they can put you in "Quick Print Ship" category.

As for workers comp, it Only covers injury and compensation as the name implies. it we are sued for negligent in a un-safe working space, I don't think it covers. Liability is under Business Insurance policy. With Obamacare, Shouldn't Everyone have health insurance?

 

[equippaint]

Ask State Farm agent if they can put you in "Quick Print Ship" category.

As for workers comp, it Only covers injury and compensation as the name implies. it we are sued for negligent in a un-safe working space, I don't think it covers. Liability is under Business Insurance policy. With Obamacare, Shouldn't Everyone have health insurance?

As far as I know, a workers comp policy provides protection from lawsuits for on the job injuries. Yes, everyone should have health insurance, that was the point of the individual mandate. If we had some form of nationalized healthcare then maybe we wouldnt need to pay for workers comp policies or at least the medical aspect of it. You have car insurance that pays for medical, then wc to pay medical then health insurance for medical. I pay more in insurance a month than I do for our business property mortgage, equipment loans and my home mortgage combined. Totally ridiculous and a real economic drag for small business.

 

[Rydaddy]

This thread got off topic. To OP, start calling local agents and get quotes. Sounds like you're getting hosed, and it could be because someone at State Farm is confused...

 

[Pat Whatley]

Yeah, wait until the insurance guy tells you that any cutting devices must have yellow caution tape around them, lock out devices, proper safety gear and the like....even after you show him the tiny little blade out of your Summa plotter. Shop every independent agent you can find, eventually you'll find one who will actually put in the time and effort to get you in the right category and the right coverage levels.

 

[FatCat]

Our insurance is through Erie - great company, rates are very reasonable, we have excellent coverage and our agent was very helpful in hearing our needs and getting us what we need and didn't try to oversell us on extra crap.

 

[chester215]

Back when AIG was looking for ways to generate more income they changed our WC code and back charged us the difference for the previous year.
It is legal to do but our agent said he had never heard of an insurance company doing that before.
It was around a $40k to 50k bill making our rate about the same as roofers since we were in the WC pool. Around 40%.
Our insurance agent paid for a rep from NCCI in FL to come to CT and review our case. They decided in favor of AIG so our classification now includes high risk activities such as billboard signs (9551), we mainly install real estate signs (classified as installing fences before).
We refused to pay and they sued us, we settled a few years later for about 1/3 of what they wanted but we are forever stuck with a classification we are unhappy with.

 

[billsines]

INSURANCE = RIGGED GAMBLING

 

[fresh]

Back when AIG was looking for ways to generate more income they changed our WC code and back charged us the difference for the previous year.
It is legal to do but our agent said he had never heard of an insurance company doing that before.
It was around a $40k to 50k bill making our rate about the same as roofers since we were in the WC pool. Around 40%.
Our insurance agent paid for a rep from NCCI in FL to come to CT and review our case. They decided in favor of AIG so our classification now includes high risk activities such as billboard signs (9551), we mainly install real estate signs (classified as installing fences before).
We refused to pay and they sued us, we settled a few years later for about 1/3 of what they wanted but we are forever stuck with a classification we are unhappy with.

that is f'ing insane. its almost worth it re-register your business and get a new tax id.

 

[fresh]

Yeah, wait until the insurance guy tells you that any cutting devices must have yellow caution tape around them, lock out devices, proper safety gear and the like....even after you show him the tiny little blade out of your Summa plotter. Shop every independent agent you can find, eventually you'll find one who will actually put in the time and effort to get you in the right category and the right coverage levels.

All of our saws and power equipment is in a back room, our panel saw used to be out in the open but we moved it back a few years ago. I don't admit that we have that equipment, mostly because employees don't use them, and i'm not going to sue myself.

I mean, actually, isn't covering owners on WC a conflict of interest? Like, I could could sue myself, but it wouldn't cost me anything since its my insurance that would have to pay out.

 

[fresh]

This thread got off topic. To OP, start calling local agents and get quotes. Sounds like you're getting hosed, and it could be because someone at State Farm is confused...

I actually really like my SF agent, and they are trying to get me a better rate because they agree its insane. When he sent our policy to underwriting, they classified us as "automotive services" since we do vehicle graphics. Putting us in the same category as auto repair shops and quick lube places.

But I am going to shop around, I was just hoping to be more informed when I call around for quotes.

 

[chester215]

that is f'ing insane. its almost worth it re-register your business and get a new tax id.

We discussed doing that but they would probably look at our company history and figure it out eventually.

Since we are an LLC we have been able to work around the WC issue, we would be out of business if we had to pay a 100k WC bill every year.

 

[CPRsigns]

We recently switched our business from a partnership LLC to an S-corp. The headache of not having a paycheck to verify income was getting to be way too much, but now I feel like I made a big mistake.

I called my insurance agent to make the switch, and he needs to write a new policy. I had inquired about adding a rider to cover vehicles left on our property overnight (or whenever) and that prompted him to change our classification code, resulting in a policy that is literally 5x more expensive. We are in NJ, currently with State Farm, and the only classification that they can find that will work is the same one for AUTO REPAIR SHOPS. So our generally liability insurance, with pretty basic coverage, is 4.5% of our annual sales. That seems insane. Also, since we switched to INC, we are considered a brand new company and don't get the benefit of 12 years in business or however many years we've been using our insurance agent.

And don't get me started on workman's comp. I had it before, but we didn't have employees last year, so i canceled it. Now i'm trying to get it reinstated and its so annoying. I got a quote from a different company who also "doesn't insure sign companies, but can offer us a policy at a rate of 35% of salary, with a $10K down payment."

So, anyway, do you know what your classification codes are? We make and install vinyl signs, dimensional lettering, vehicle wraps/lettering. The standard stuff, no electrical, no crane work, we don't even have a bucket truck. We only install jobs that we can reach with our ladder. AND if you're in NJ and like your insurance agent, i'd love to call them for a quote.

thanks!

Find an Insurance Broker who is able to Write through a lot of various companies. My Liability is through Travelers and my Commercial Auto & Workers Comp is through The Hartford. The coverage for vehicles kept at you location that belongs to others is called Garage Keepers & normally a rider or endorsement on your General Liability.

State Farm/Allstate are great at what they do, which is personal lines insurance. While they do offer some commercial products, it isn't their core business, so they don't do it as well and are not as competitive. (In another lifetime my wife and I owned an Allstate office in Ca)

 

[Jean Shimp]

I recently dropped State Farm and am insured by Safeco. Saved a bunch of money. We are a 3 person shop. My husband and I are exempt from WC as we are both officers of the S Corp. Our employee is leased. We pay 1.5% of his wage to the leasing company. They pay all the taxes, Soc Sec, and Work Comp; file all reports, do direct deposit. It's worth the price for us. Work comp was too high to afford for us as an individual company.

 

[fresh]

Thanks everyone. I'm calling around to get new quotes. A few things I've found out that really stink: 1. In NJ, everyone, including officers, need to be covered under workmans comp. But I'm going to make sure only my partner gets classified under the high risk category, since I never do installs and I'm basically an office manager. 2. If you have ANYTHING to do with vehicles, even if you don't install yourself, you're going to be assessed with an automotive category. I even said we might switch to outsource all vehicle installs, but they claim that it doesn't matter. I asked if online bumper sticker sellers needed to have this type of insurance, and they said yes. wtf.

Has anyone here ever had an insurance claim against their business because of vehicle lettering?

Its such a scam.