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Up Topic Welding Industry / General Welding Discussion / LIABILITY INSURANCE
- - By BLUERANGER (*) Date 04-26-2004 02:02
Recently my buisness liability insurance came up for renewal and my premium went from $2200 a year to almost $25000. I have never had a claim. I have searched for better rates but found nothing. Being a one man show ,this will put me out of buisness. Has any one else out there had this happen to them? Can any one recomend an insurance company that provides a decent rate to mobil welders like myself? Any help would be greatly aprieciated!
Parent - By bmaas1 (***) Date 04-26-2004 05:00
Did you inquire why it jumpedso high?

Brian J. Maas
Parent - - By jwright650 (*****) Date 04-26-2004 10:35
Maybe it's like car insurance, they figure you are a higher risk because you never had any claims and the longer you go without one, the higher the risk of having one? I dunno. I have heard of insurance companies making a mistake.

I think I would be asking, WHY? That's quite a jump from one year to the next.
John Wright
Parent - - By BLUERANGER (*) Date 04-27-2004 04:16
I did ask several companies why it was so high and the response was basically all the same. Welders have such high exposure to to lawsuits,(fires,explosions,weld failure causing injury or property damage) that the insurance companies did not want to take the risk. All this time I thought that is what insurance companies did,take risks??
Parent - - By jwright650 (*****) Date 04-27-2004 10:11
They seem to be taking the risk, but now at your expense.($25,000.00/yr) I can see that you would have to have a lot of work with plenty of profit on it to justify paying those rates as a one man operation. Wonder if you could draft up a really comprehensive written Safety program and present it to the agent when you are shopping for insurance, possibly they would see you as a better "risk" and cut you a better deal for a year's worth of insurance. This might sound silly being a one man operation, but there might come a time that you have to hire on some help or even hire a subcontractor.
just a thought,
John Wright
Parent - - By CHGuilford (****) Date 04-27-2004 13:11
I'm no expert on insurance other than writing out my monthly payment check, but writing a safety procedure might be a good idea. At any rate, it would be worth talking with the insurance agent to see what other alternatives there are. I'm wondering if combining your vehicle and other insurances might help get their attention?

Otherwise, $25,000 per year would mean that a person needs $250,000 of billing @ 10% margin just to pay liability insurance.
Not exactly an encouragement for a person to make an honest living in inspection. I do hope that changesfor the better.

Chet Guilford

Parent - By jwright650 (*****) Date 04-27-2004 13:52
Chet,
Here in Virginia, the VOSH will help employers with less than 250 employees for free. They come in and this visit is treated as a voluntary action to get a safety program started. This also waives you of any surprized inspections, for a period of time, by entering this program on your own. They will work with you to get any compliance issues straight without any fear of fines. They will do air quality sampling and all sorts of testing and it don't cost the employer a penny. It really isn't a bad idea if you are desiring to be compliant with the OSHA regs. Let's face it, you almost need to be a lawyer to read and understand exactly what is required of you in the OSHA regs book as an employer.
John Wright
Parent - - By chabat (*) Date 04-27-2004 15:06
The only thing you can do is shop every insurance agent in town. They changed the premium that high because they do not want to write that line of business anymore, so they price everyone out of the market. What state are you in?
Chris
Parent - - By BLUERANGER (*) Date 04-27-2004 21:34
New York
Parent - By chabat (*) Date 04-27-2004 22:03
Hmmm. I am only licensed in Texas, but the best thing would be to just keep trying different agents in your state. Also, ask other welders in your state who they use that is good.
Parent - - By billvanderhoof (****) Date 04-28-2004 02:44
Are you sure this isn't one of those decimal in the wrong place things? A rise to $2500 would not have been unusual. Ask your agent to research this for you.
Bill
Parent - By Arcandflash (**) Date 04-28-2004 03:42
That's my thought too. If they didn't really want him as a risk I think they would have just said so rather than quote a number like that.
Parent - - By RBeldyk (**) Date 04-28-2004 12:45
Liability - Business insurance that protects you and your business with coverage for claims related to allegations of negligent activities or failure to use reasonable care.

It seems to be reasonable that if your shop would become an AWS Certified Fabricator http://www.aws.org/w/s/certification/FAB/ that the insurance provider might reduce your premium.

Without regard to company size, all companies should have a Quality Program, a Safety Program, and an Employee Handbook. Have this information available to the insurance provider.

Good insurance providers will assist you in developing these.
Parent - By weldeng13 (*) Date 05-03-2004 17:36
Does an insurance provider have to give you a written explanation of the price increase? Maybe you should demand that at the least. Just a thought.

Peter
Parent - - By Michael Sherman (***) Date 05-19-2004 12:10
This topic hits close to home. I have recently been told (in writing) that my policies will be canceled in 60 days. The reasons: 1) Gas line welding 2) High pressure pipe welding 3) Manufacture/welding/installation of industrial cranes. I too have never had a claim of any sort. I have been in business a long time and have made millions of dollars without a claim, now I believe I may just close my shop and buy a hardware store. Or something. Maybe my insurance company will give all my laid off employees a job. Maybe not.
Parent - - By CHGuilford (****) Date 05-19-2004 13:08
Wow, that IS bad news. I don't know what to say other than I sure hope you are able to find alternate insurance that is affordable.
If insurance companies keep knocking people out of business, we are ALL in trouble.
Chet Guilford
Parent - - By Michael Sherman (***) Date 05-19-2004 15:28
I have doubts if main stream America understands how big of a problem this is. I do business in Ohio and Pa. In Pa. we have seen quite a few physicians call it quits because of insurance. I wonder how many other businesses are having my kind of problem.
Parent - By Ken Dougherty (**) Date 05-31-2004 15:28
Sorry to hear of your problem. I always look for your input in this forum and have appreciated your (and everyone else's) input to my questions.

I hope you and everyone else is able to resolve this problem. Another example to the physicians you mentioned is my own. I had a private practice in CA, specializing in neuropsychology and head trauma. In addition to my insurance premiums going up, my insurance payments went down or the patient's coverage was completely eliminated. Apparently, once the bleeding stops the problems are resolved. However, my responsiblilties/liability continues on, even to the point it is recommended that I make arrangements in my will for someone to take over my records etc!

The effort to cover every eventuality, real or imagined, is become absurd. That is what drove me out of private practice. My real passion is metal work, but I have avoided anything that would leave me at risk and stay with art-metal or related.

I will be following this issue with great interest.
Parent - By LarryL (**) Date 05-31-2004 23:09
The problem of the high costs of doing business, which includes insurance costs, is widespread throughout our nation, I believe. In some states like my home state of California costs have gotten out of hand. Every week we read about companies large and small fleeing to other states or other countries. The nastiest form of cancer that has been throttling businesses in California has been workman's compensation insurance. WC premiums have been skyrocketing year after year here - in some years premiums have increased 100% over those of the previous year for certain industries. A couple of months ago, for example, I watched part of a TV program about one of California's family-owned timber companies. I missed the first half of the program and didn't hear how many employees worked for the company. I did hear, however, that the company had 16,000 acres of timber. In 2002 the company's president was honored with an award for excellence in the way he managed his forests and saw mill. What later stunned me, however, was his wife's discussion about their workman's compensation premiums. I don't recall the exact figures for each year but these were their approximate WC premiums:
1999 - $250,000/year
2000 - $325,000
2001 - $450,000
2002 - $625,000
2003 - $750,000
She then stated that they were informed recently that their WC premium for 2004 amounted to $1,600,000! And theirs was a company with an excellent safety record. I said "was" because she said that after receiving this notification, they gathered all of their employees and told them that they could not afford to remain in business. They were shutting down the company in 90 days! Terminator Schwarzenegger, our new governor, is trying hard to reduce the costs of doing business in California but I personally feel he's fighting a hopeless battle. Just before he took office, for example, our liberal legislature passed legislation that mandates all businesses with 50 or more employees to provide health insurance for their employees. As I recall, employers will be required to pay 80% of the cost of health insurance. Last week I read that our legislature is considering a bill to increase the State's minimum wage by $1 per hour. Chambers of commerce and businesses statewide have denounced this legislation because it will force businesses to lay off employees in order to keep costs under control. Notwithstanding these complaints, I won't be surprised if our give-away legislature passes the legislation. What doesn't surprise me is the fact that for the past 3 years California's population has been declining as more and more people (taxpayers) have been emigrating to other states.

Off topic but in a closely related vein: as a budding manufacturer myself I can understand why US manufacturers have been outsourcing their production. You can learn some of the reasons why in the following article (sit down because it's a long one):

http://www.nam.org/s_nam/sec.asp?CID=201308&DID=229450
Parent - - By brande (***) Date 06-05-2004 04:11
I feel for you, really.

Much like you, I was working on my own-working in the inspection/fabrication/electrical equipment field. I was really having a lot of fun and making money. Most of this money, I found, went to some insurance or another.

Insurance came to be a burden I could not bear anymore.

Got an offer from a local company for CWI and QC services-jumped on that like a dog on a bone!!

I would have really liked to stay as an independent-my time was my time, I was hoping to wind down my career as an independent-with some time for fishing!!

In all-I found the regular pay and INSURANCE a necessity where I should be-wife, family and all.

If single, I might do things differently.

As it is..I might retire in my '80's

FWIW

Good Luck

brad

Parent - - By Michael Sherman (***) Date 06-17-2004 16:31
I have finally found insurance. It was not an easy task. I have learned alot about how our insurance industry functions here in America. It is a complicated industry and will only get worse. Thank goodness I have never had a claim, I may not of been able to get insurance at all. It seems the act of being canceled is a black mark and many companies will not offer you a quote just because they are assuming something is wrong with you. Back to business as usual, for now.

Mike Sherman
Shermans Welding
Parent - By BillC (**) Date 06-17-2004 19:19
Mike,

Glad to hear you're "back in business" again. I'm sure it was no fun...

Regards,
BillC
Parent - - By jwright650 (*****) Date 06-17-2004 19:43
Wow Mike,
I too am glad to hear all is business as usual for you and your shop. I haven't kept up with this thread, so I was reading back into it a little and saw what all you have been through. Sounds like a tough road for many business owners.
John Wright
Parent - - By Michael Sherman (***) Date 06-17-2004 20:54
It can be tough sometimes. But as many of you know, the rewards can be significant. I was never out of work because of this, but I was within 30 days of being completely uninsured and the first few companies I tried told me "No thanks and we respectfully decline to quote your business." To me, being uninsured is tantamount to being out of business. The good side is the company I finally found actually saved me a few bucks per year. Imagine that.

Mike Sherman
Parent - - By westval Date 06-26-2004 22:14
Mike,

I hav kicked around the idea of going out on my own, and looked into insurance. The quotes I received were in the $700.00 - $900.00 range for "Personal liability insurance". It was explained to me that this would cover against lawsuits and accidents. Seeing that my quotes are much lower than what I am reading here, I'm starting to belive that I didn't explain what insurance I needed to the agent. What insurance do I need?

Thanks
Clay
Parent - By Michael Sherman (***) Date 06-27-2004 01:10
You need insurance to cover the work you and your employees do, the products you make and the property that you do business with and/or on. Insurance companies are peculiar animals. If they have asked all of their questions and have given you a quote, take it. Explaining too much to them seems to make them nervous. Good luck.

Mike Sherman
Parent - By billvanderhoof (****) Date 06-18-2004 03:18
My Jewish friends have the perfect word for this- Mazeltov.
Bill
Up Topic Welding Industry / General Welding Discussion / LIABILITY INSURANCE

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