Portable Milling Liabilities

[Jeff]

Can Some of you guys tell about what kind of coverage you need when in the portable sawing biz?  How are things like potential injury to your help,( which I understand is generally provided by the log owner) handled.  What about insuring the mill?

I think I am having a mid-life crisis. My stationary owned by someone else hate to go to, no, cant stand to get up in the morning and go to sawbooth has to go. Somehow. Wood is all I know. This makes sense to me. But I am a worry wort and a non-risk taker. So, what kinda risk would I be talking?

[Tom]

I can only speak for my experiences and my area but Liability insurance for the small mill owner is economically non-existant.  My wife finally found a company that would write a policy for $10,000 per month.

While in transit, the towed vehicle is covered by the liability of the towing vehicle.

I don't hide this fact from my customers and explain that I don't have employees for that and Workman's compensation insurance. reasons.  The last price I got on WC was seventy cents on the dollar.  I could not pass that cost on along with the minimum wage,  payroll taxes and time and effort to keep the books, so the log owner is responsible for the labor.

I've not had an incident where a laborer has been hurt on the job that could be directly attributable to the mill but am very carefull and conscious of the where-abouts of workers at all times.  My operation is never in a hurry and I stop people who try to work too fast just so that I won't be put in a compromising situation.

I've also told folks who want to get into this business that the money is in the selling of the wood, not the sawing.  If they want to raise a family and send kids to school, they should consider an operation larger and more envolved than just sawing logs.  

It's not unusual to have a $300 or $500 day but there will be days of $100 grosses and days of downtime that will make you look for other income.

What you are doing with the furniture is a good example of a good "support business".  Finding and supplying specialty markets like "wide boards that are otherwise unobtainable",  Mantels, beams for corbels,  Hex or Octal porch posts etc.

It's the benefits that one may miss the most.  IE. health insurance.

Larger Companies are doing most of their work with machinery and little labor, so their labor charge per board foot is minimal in comparison with a small mill like we run.  The insurance companies take advantage of this and charge these companies healthily but the company can stand it because his labor force is minimal.   The small operations are labor intensive and the insurance companies draw no distinction betwee the two.

A small mill is affordable enough to use it as a second business until you get established, working weekends etc.  It would take a lot of Motsa (?) to quit everything else and jump into this "cold turkey".  

[Scott_R]

If ya always do wat ya always done. Yawl always get what ya always got! Scott

[woodman]

     I looked into it when i first started but the people around here did not know whit i was talking about. Saw mill whit??/?

[Bud Man]

May 3 " My Sawmilling Journey Begins" , I've stumbled through life and have always made a good livelyhood, and since I was 35 have done it my way on my own.  A good work ethic, mixed with good intentions, meeting people half way, and utilizing good sense has carried me this far.  I always carefully wade into things, get an understanding  for the needs and requirements, for the given task or goal at hand, and when I discover what works,(pardon my language but) I pound the ever living s... out of It. :-[ ( It's been that simple) Most people fail because they are lazy or reach a level of complacency with putting groceries on the table and a few weeks vacation each year. :'(  They come to think that's all they can attain, and really with just a small additional effort and a little planning, in this country, there is no limit.    I enjoy working hard, and always try to find a way to do it smarter and rarely make the same or similar mistake twice !  I hire people that have good intentions and good attitudes and I've always paid them above the industry standards, and always get results above the average, or I politely get new people.  I live like royalty of a very few years ago and give thanks daily that I'm an an American with the opportunity to increase my standard of living each day just by getting off my a.. and putting my pants on, applying myself, and going to work. I don't like habitual whiners and won't tolerate them or be around them, there a bad influence and I don't like to even breath the same air they exhale !  I won't tolerate being around drugs or people engaged in illegal activities that would jeopardize my ability to come and go as I please, when I please. You say Insurance and liabilities, I will carry the required by law amounts and will not apologize for my coverage, and If people want to deal with someone else, so be It.  I don't intend to pay one cent more than is required by law in insurance and have been incorporated to protect my few personal assets for 20 years. :P  I have always taken my business serious and won't tolerate any Monkey Business, Safety is a paramount issue and I will stop anything that I'm in the proximity of that I feel could lead to an injury at any time, or I will pull a Paul Harvey on them and bid them Good Day. I guess if you believe in luck you could say I've been on a roll and my life has had many blessings but I don't think luck has entered into things too many times. I've worked for my self for the last 18 years and the risks don't seem to be as bad as working for some one else and always worrying about so called job security within a company or an industry! Working for someone else, your always worth what It cost to replace you.  I purposely surround myself with people who enjoy life and understand that pleasantries are a result of efforts put forth and I will not allow deadbeats to take me down with them, misery does love company !  Do I know what is ahead of me in this sawmilling business ? I hardly have a clue !  Will I be successful and enjoy the journey ?  Unless death or sickness occurs, You Can Bet The Farm  "It's Going To Happen"   Do I think Jeff B can intelligently make a transition to becoming sucessfully self employed in a field he modestly says is all he knows? I don't know all of your circumstances, but  "I'd  Bet The Farm You Can"  ;)

[woodmills1]

I have coverage for the truck I tow the mill with and then specific coverage for over the road hauling on the mill itself.  I also have a half million in general liability for the business, but the insurance man was pretty clear that this doesnt cover anyone who would act as my employee.  it will cover damage to others or their property by my actions.  when a customer works with me for his wood it is his responsibility

[BRP]

Amen.......Budman!

[ARKANSAWYER]

First things first,  If you are making a living with your mill, your truck insurance will not cover your mill in an accident.  You had better check your policy.  It is commercial and not covered.  A friend of mine found this our last year the hard way.  He is a river guide and uses his own boat and on the way to the river was in a accident and his boat was not covered.  Had he been just going on his own it would have but they called it commercial and he lost in court as his policy states not commercial ventures in the small print.
   Try to get insurance and you had better have a pocket full of coin and a bottle of asprin to dull the pain.  My mill is coverd by it's own policy ($510 a year) and my truck is commercial as tagged ($800 under farm policy).
   I have a contract that states who is responsible for what and how things will be done and every customer signs one or I donot saw.  The first thing I learned in combat was to COVER YOUR ASS or get it shot off.
  AMEN Budman!!  I love what I do and do what I love.  Now if I could just make some money doing it. :D
   The best thing about working for yourself is you get to pick the 12 hours a day that you want to work and which 7 days a week you wnat to do it in.
ARKANSAWYER

[woodmills1]

hey I thought it was 14 a day and 8 days a week? :D

[Keith_A]

 8) 8) 8)  Yeah Budman.   Thanks for the motivation.  I must admit, I feel a little like I am jumping in head first without checking how deep it is.  I guess the next 15 months is plenty of time to check the depth.  I am also of the opinion that if you are determined enough, are willing to learn from your mistakes, and have a plan that isn't totally based in fantasy, you can succeed at anything in this country.

[Bibbyman]

All of the above is a major part of why we don't do mobile sawing, hire help, or have anyone help even for free.  We even like to keep customers/people away from the trailers or truck when we unload or load them.  As often as we can we'll ask customers to drop off their trailers and leave them loaded.  We'll unload them later and reload it with the lumber and call them to pick up the trailer.

Works for us.

[JoeyLowe]

 ;D  Some interesting topics here, especially since this is an area that I have made a lot of money at. (Business insurance, that is 8)).  First things first.  Tom, you live in the employee leasing capital of the world. Have you thought about using that service.  In a nutshell, you contract with an employee leasing company showing yourself as the only employee.  Your labor burden rate would be as follows: hourly payrate + payroll tax rate (8.45% for feds and typically around 2.7% for state) + worker's compensation rate (typically in Florida about 12%) + 2% for general liability.  Commercial auto would be separate.  So using real numbers as an example, if you paid yourself $15.00 per hour, your total labor burden would be 25.15% of that or $3.78.  So you would have a total cost of $18.78 per hour.  What do you get in return?  Aside from the purchasing power of a larger company (i.e., the employee leasing company), you would receive general liability coverage with about $10 million policy limits, worker's compensation typically with $1 million limits, payroll service (they handle the taxes and report filing and actually cut checks), improved cash flow (your are typically billed monthly, although you may pay yourself weekly, bi-weekly, or monthly).  More importantly, you have access to many benefits including health benefits (with all of the bells and whistles), cafeteria plans (no, not free food ;D), retirement plans, etc.  The real beauty of this arrangement is that the leasing company doesn't meddle in your business, but absorbs all liability where employees are concerned.  For more information on this, you could go to:

http://www.diveweb.com/inlcostl/features/uw-wi99.02.htm

I wrote an article for a trade magazine several years ago that adequately describes this concept.  I'm using it (have used it) for years just for the perks and benefits.  However, if you are a parttime sawyer, it won't work.  The coverage is set up as a pay as you use it plan so there are no huge year end audits or big deposits.  Unfortunately, if you don't use it, they cancel the contract and you have to re-contract, but it is an ideal solution for a company that is running  1-25 employees and working regularly.

Secondly, I agree with Arkansawyer.  Plain jane auto insurance won't cover the old sawmill, just like plain jane home owners insurance won't.  Get a separate policy for the mill and get a commerical auto policy for the truck or park it.  Otherwise, you are going to get burned!

Thirdly, this may be under another post, but I will address it here too.  Can you make a living doing this?  I dunno yet.  I'm too new at it, so I can only share my actual experiences so far.  "DON'T QUIT YOUR DAYJOB BUT WORK THE BUSINESS LIKE IT WAS YOUR ONLY JOB"  I bought my mill in January.  So far, I have expended $44,047.14 for the mill and support such as maintenance, tools (peavys, chain saws, blades, parts, etc. and labor for a helper).  My income side has went from $0.00 the first month to just over $3000.00 this month.  The month is a little half over and I'm expecting about another $2000.00 in income this month.  I'm a little ambitious, but I have set a breakeven date of August/2003.  I think that I will make it. What I mean by breakeven date is that I have fully recovered my initial investment and monthly income is meeting or exceeding monthly expenditures.  My long term goal is to turn this into a viable business for my sons to use to put themselves through college when they come of age.  So my short answer is as follows,  if you decide to make the switch, make sure that you have plenty of captial to absorb the hidden costs and make sure that you have time to cut, otherwise don't do it.  Buy a cheaper mill and work it as a part time hobby.  That's all I have, but I would add that I still haven't found my nitch, nor am I running around willing to take any old job that comes along either.  People are calling and stopping by and I have jobs booked for at least the next 4 weeks.  So as the song says, the future looks bright! 8)

[Tillaway]

You learn something new every day.  Thanks Joey, how would one go about finding one of these companies?

[JoeyLowe]

 8)  Just so happens that I represent a couple of these companies.  But if you are looking for something a little closer to you.  Do a search for NAPEO and list your state.  Florida has more of these companies than 7-11's. ;D

[Tom]

If you are talking about the damage to the mill from an accident or theft or something like that, then you're right; the towing vehicle insurance doesn't cover it. The Liability insurance of the towing vehicle does cover the Liability of the mill while in transit.  That is my biggest concern, hurting someone.  I insure myself as best as I can to insure I can take care of any damages I cause to others.  An Umbrella policy of a million is important in today's society and it doesn't hurt to have more.  I have been on the phone with my carrier today to confirm my coverage.

Leasing employees sounds like it may be a good idea.  I tried it in 1995 or so, when Charlie was down here pulling 2"x12"x20' boards and eating peas.  The companies we contacted wanted no part of a sawmill operation.  I have since become accustomed to operating alone and I like it.  Perhaps if I had plans to expand or become a production producer, I would consider it again.  I have gotten to enjoy the independence of an operation like this and my customers, for the most part, enjoy seeing my come.

I even leased my second mill at one point to someone who wanted to saw. Not a lot of money there but it was helping us both.  I don't think I would be interested in doing that again either.  Age has a lot to do with my desire to punch my own clock, eat when I'm hungry and sleep when I'm tired.

It feels good to keep as much of the Government on the other side of street as I can too. I despise being watched over my shoulder and told what to do.

Each to his own though.  I understand.

[macurtis]

I was looking for insurance for my sawmill and liability,
called Mississippi Loggers Association. They know how
to find you a policy, try your states Loggers Assoc.

[timberbeast]

I've been told by an insurance agent that an "inland marine"  policy would cover theft or damage to my mill  (it isn't portable,  but I could make it so).  I haven't done that,  but I do have million dollar umbrella,  doesn't cost too much.
Be aware that some people who you may want to sell to won't buy from you without a disclaimer that you alone did all the work in cutting,  skidding,  milling,  hauling,  loading,  etc.,  or else proof of Worker's Comp in place and proof of insurance.  This probably is not applicable to most mobile sawing,  but who knows,  you may be asked to cut and mill a whole forty,  and then the picture changes...
I can also tell you that if you use only your real name for the name of the business,  you won't have to register it or incorporate.  That doesn't mean hiding from the IRS,  just simplifies things,  being a sole proprietorship.  A corporation,  on the other hand,  can (usually)  protect your non-business property in case of a lawsuit.  A good book on business is "In Business for Yourself"  by Bruce Williams,  you may have heard his talk show.  It doesn't deal with logging or milling,  just business in general and provides a wealth of hard-earned knowledge.