Sawmill Liability Insurance ????

[manoverboard]

I'm considering hiring a few helpers for a job I have lined up. Does anybody have  liability insurance for employees or volunteers? I am having difficulty finding this type of insurance around my area. Am I barking up the wrong tree or is this a viable insurance option? Thank you for your time... Russ M.

[nk14zp]

look to the left.

[amgont75]

I will help you out even faster....

http://www.mai-ins.com/ins_bandsaw.html

[manoverboard]

Yeah, I tried both of those suggestions already  :. The GL (general liability) Liability is for the mill only, not volunteers/employees. So I'm still looking.

[WDH]

Manover,

I can tell you, it will be tough.  I have been turned down in three places already.  I wanted liability insurance for people coming onto my property to buy lumber.  My home owner's policy does not cover that because it is viewed as a business.  I finally got liability coverage for people coming to buy lumber, but the underwriter would not agree to cover liability around the sawmill, so I have to keep people away from the mill or either take a risk, which is what I generally do  .  The insurance industry does not like and does not understand portable sawmills. 

[red oaks lumber]

the insurance indusrty  dosent have a clue about the sawmill industry period.! every year they come give me a rectal exam, raise my rates reduce my coverage. :(  unless they are actual employees at your location i don't think you'll find coverage.
i would talk with your ins. agent to see what all your options are, maybe there is something on your homeowners policy that covers you. who knows.
good luck!

[mesquite buckeye]

Workman's comp.    Costs plenty for timber industries. :(

[WDH]

I was looking for liability insurance in case Johnny Woodworker from Atlanta who wants one little slab cut for $25 does something stupid around the sawmill and promptly sues me for $250,000 because he is an idiot and wants to get rewarded for being that way  . 

[mesquite buckeye]

Do you have enough land around your house to call it a farm? All responsible farmers get liability ins. for just this purpose. Lots of potentially dangerous eqpt on the farm.

[YellowHammer]

I had a "slap in the face" wake up call on just this topic when a customer almost had a board drop on him and tell me "I just about got this load, and a whole lot more, for free." 

After he left, I called up my agent and asked if my expensive cattle farm liability insurance would have covered it.  The answer was a quick "Nope."  My agent explained my farm insurance would cover my Angus bull tromping the guy into the dirt, or a tractor accidentally running him over, but wouldn't cover a 2x4 dropping on his foot, because the 2x4 was not farming, it was a product of the sawmill business.  Things were different from then on! I decided not to become somebody's lottery ticket, and to protect myself and my assets.

It took me literally over a year (insurance underwriters do not make financial decisions fast or lightly) to get decent insurance that didn't have so many loopholes so as not to be worthless, and gave coverage to both my farm, saw milling business and retail sales business.  No success with pretty much every insurance carrier I came across, including the big name carriers that everyone knows about.  Lots of folks sold insurance, and could cover a portion here and there, but when push came to shove, none could fully protect my combined assets.  I couldn't get sawmill insurance from companies that advertised sawmill insurance because I wasn't big enough, or been in business long enough, or didn't have a loaded Swiss bank account.  I couldn't even get "lumberyard" insurance.  I could insure my sawmill if it burned, but couldn't insure my farm property that would have been collateral damage without incredible premiums.

The end result and the interesting point (I hope) is that one of the major things that has influenced my business model and capability is the cost and availability of insurance.  It many ways, it has streamlined things because it eliminated areas of the business I used to do myself as a homeowner, farmer, and hobby sawyer, but now can't as a business due to the cost of insurance. 

For example:
Logging insurance -  nope- I don't go to my local neighbors farms and cut their trees to mill anymore.  As a business I need loggers insurance.  I'll just pay to have the logs delivered by a "real" logger.  He gets to buy the insurance, not me.

Arborist Insurance - nope- customers have to cut down their own yard trees now and bring their logs to me.  Incredibly high priced insurance. Now I know why tree cutters charge a thousand bucks a tree. I didn't like "yarding" anyway, and now I have an excuse to tell people why I won't cut down their million dollar walnut tree that's leaning over their house.

Commercial Truck Insrurance - nope - I can actually save money on the first 20 loads of logs of by paying log truckers a bonus per load to deliver to me as opposed to me insuring my own truck and trailer.

Workman's Comp? - nope- I work alone, or immediate family named on the coverage only. No employees.

Liability- a must have, but you better play by the rules or you'll be hung out to dry.  When a customer shows up, the machines get turned off.  Everything.  Sorry, no sawmill demo today, I'd like to show you how it works, but...

Offsite sawmill insurance? Not anymore.  My mill has wheels but has not moved an inch in quite a while.

Umbrella Coverage? Got it.  It's not really a big umbrella, but it does help augment the liability insurance.

An insurance agent told me that there is a clear line for determining if you are covered under your homeowners policy.  If money regularly changes hands, its business, and you are not covered; its that simple.  You need some type of business insurance if you are making money on a business.   Under my old, limited, farmers insurance which I don't have anymore, if my equipment had cow poop on it, my farmers insurance covered it, but if it has sawdust that I made money on as part of the sawmill business, not covered. 


Didn't mean to get preachy, but I had no idea of the difficulty or expense in getting insurance for these types of combined operations, maybe these experiences will help somebody.  I'm not saying it can't be done, just saying it wasn't easy or cheap.

YH

[Po-Jo]

great info YH

[dgdrls]

YH,

who carries your insurance?

DGDRLS

[nk14zp]

Thanks yh.

[John S]

Trying to set up part-time milling business, workmans comp. here in NJ $7,000!

[WDH]

Mesquite,

I have a farm, but like Yellowhammer, they will not cover liability around the sawmill because the insurance "code" for a farm does not include operations around a portable sawmill.  Your policy has certain "codes" that describe what is covered and what is not.  You have to have the right "code".  For the same reasons as yellowhammer, I have tried to stay under the radar.  If someone gets hurt around my little operation, it needs to be because they were "buying lumber" not "operating" the sawmill. 

[YellowHammer]

Your policy has certain "codes" that describe what is covered and what is not.  You have to have the right "code".  If someone gets hurt around my little operation, it needs to be because they were "buying lumber" not "operating" the sawmill. 

Exactly- its extremely difficult to find one carrier that will insure all the operations concurrently.  Most do not have that broad a coverage.  On the other hand, insurance companies do not like mingled or hybrid polices with other insurance companies under the same roof.  I have a house, farm, sawmill, lumberyard, and retail sales on the same property and using the same equipment. Too much confusion, too much gray area. 

I was told by several companies that the best solution was to physically separate my operations, and have separate insurance coverage and assets for each location.  I got to the point where I was going to re-deed my farm and break it into three distinct areas of home, sawmill, and retail sales.  Each would have a distinct border and separate insurance policy. 

I would highly recommend anyone in the business to specifically talk to your insurance company to find out exactly what they will cover, because sometimes even the insurance agents were as surprised as I.  Many times I heard "it should cover it" or "I can't believe its this hard."  Talk real scenarios, ones that you may experience everyday.

I would also recommend an insurance company that has local reps and agents, that way they can walk around your operation and get a true idea of what is going on.  Most insurance agents are very helpful, and its up to them to convince the underwriters to insure you.

If you want a good laugh, here's a question to ask your insurance agent if you have a co-mingled operation like mine.  "How am I covered if a customer, who just paid for a stick of lumber (business operation), accidently gets run over by my tractor (farm operation), while leaving the premises in their car on my homeowner driveway?

YH

 

[woodweasel]

Try  Stanley McDonald Insurance Co.  LaCrosse,Wisc.  893-1946 Dont rember the area code :(

[amgont75]

Great post guys.  Can anyone give a rough cost how what the insurance costs in their area for a portable sawmill?  I know it hard to find but once you do how much did it cost you?

[YellowHammer]

YH,

who carries your insurance?

DGDRLS

Sent a PM.
YH

[woodweasel]

 I pay $687 a year for general liability & fire/ theft, ect on the mill! The liability does not cover any  employee.It does customers. If I mill at home, homeowners covers me and my 1 employee ! If im off my property its questionable about my employee   My cost was based on expected gross per year! Most of my milling is personel. If I expand my operation, cost will go up! ;D

[amgont75]

Thank you woodweasel that gives me a general idea of the cost.  I am sure is varies from state to state but thank you for sharing the cost there.

[manoverboard]

Thank You All, especially YellowHammer, who perfectly described the scenario I'm only beginning to encounter. I guess, with all corporations, it is all about making money. I will apply the advice hear and begin my quest while I'm still doing this part time... BTW for my brand new mill and one additional operator (both with < 2 years experience) would cost ~$1100 with little to no actual coverage (loopholes/fine print) so it does pay to scrutinize. I'm not saying that what I've found thus far is bad, I just did't expect the exorbitant cost for so little coverage.