Liability Insurance - Sanity Check Please
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  1. #1
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    Default Liability Insurance - Sanity Check Please

    I reached out for a quote for a business liability insurance policy, that would cover accidental damages when working inside a customer's plant and/or programming CNC equipment.

    I don't believe the insurance brokers understood what I was intending (understandable I guess) and wrote up the policy as though I were a "millwright & machinery installation" or some other verbiage.



    The annual premium is a tick under $5,000.


    Anyone have any thoughts if that's too high, or par for the course?

    Thanks

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    Need to know just how much coverage you all are getting....
    1 million ?
    5 million ?

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    I have insurance coverage for what you describe. 1 Million plus 1 million umbrella. Just over $3000/yr.

    Mine also covers contents, or my equipment in my shop, and product liability.

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    It's a 1m policy, 2m aggregate, 2k deductible.

    FWIW I'm not really interested in working on their facilities, or installing equipment as the plan's description would entail.

    I'll call them back and see what they can do.

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    I believe Under $5000 is reasonable

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    Or you could not waste your time and money on insurance and instead just borrow the $1 million in the 1 in 2000 chance that you need the money.

    In fact, I bet you could get a $1 million line of credit from a bank and the commitment fee would be about $5000 per year, but the difference is that you would have $1 million in cash that you could actually use instead of bullshit promises from an insurance company, and the cost would be same.

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    Quote Originally Posted by Jashley73 View Post
    I reached out for a quote for a business liability insurance policy, that would cover accidental damages when working inside a customer's plant and/or programming CNC equipment.

    I don't believe the insurance brokers understood what I was intending (understandable I guess) and wrote up the policy as though I were a "millwright & machinery installation" or some other verbiage.



    The annual premium is a tick under $5,000.


    Anyone have any thoughts if that's too high, or par for the course?

    Thanks
    Don't you become 'the contractor' when working in other people's shops, and they have to cover you as well?

    I don't know who in their right mind would insure against cnc programming errors. That's just asking for trouble, from the insurer's viewpoint. Ridiculous premiums follow. Sure, accidents can happen and we hope they don't but really, the risk is very high that a machine tool could be damaged at nearly any moment. That's why this business isn't for pussies.

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    Quote Originally Posted by HuFlungDung View Post
    I don't know who in their right mind would insure against cnc programming errors.
    Errors and omissions is a very common insurance line item. You can insure your own errors and you can insure against the errors of contractors you hire.

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    Quote Originally Posted by HuFlungDung View Post

    I don't know who in their right mind would insure against cnc programming errors. That's just asking for trouble, from the insurer's viewpoint. Ridiculous premiums follow. Sure, accidents can happen and we hope they don't but really, the risk is very high that a machine tool could be damaged at nearly any moment. That's why this business isn't for pussies.
    People build houses in flood plains, tornado paths and on sandy beaches that disappear when there's bad weather.

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    I would check with Sentry - best in the business for Machine Shops. I think $5k is outrageous.
    Last edited by Joe Miranda; 05-17-2018 at 12:26 PM. Reason: addition

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    Quote Originally Posted by Garwood View Post
    People build houses in flood plains, tornado paths and on sandy beaches that disappear when there's bad weather.
    Yep, and a lot of them don't want to pay the premium for over land flood insurance either. You can probably insure anything, but at what cost does it make sense?

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    Quote Originally Posted by Garwood View Post
    People build houses in flood plains, tornado paths and on sandy beaches that disappear when there's bad weather.
    Not sure what you mean, but speaking of flood insurance..

    I have to carry it on my house because I have a small (SMALL) part of my property in a "flood zone" (it's not even near the house )

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    Quote Originally Posted by Mike1974 View Post
    Not sure what you mean, but speaking of flood insurance..

    I have to carry it on my house because I have a small (SMALL) part of my property in a "flood zone" (it's not even near the house )

    I thought Florida was a flood zone.

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    I've found a wide variance between insurance companies, even brokers, for the same coverage. A lot left to interpretation . . . and also the kinds of risks the company likes in insure. Helps to get multiple quotes.

    One of the benefits of being insured is that - knowing you'll have competent legal representation -- you might be less likely to get nuisance suits. Works the other way sometimes -- some insurance companies will cave, pay, and drop you rather than defend a reasonable position.

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    Quote Originally Posted by alphonso View Post
    I thought Florida was a flood zone.

    It's all a scam. I recently built a new house. I picked the lot I'm on because I don't need flood insurance. For the same house on a lot literally across the street, I would have. It's a scam.

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    Quote Originally Posted by Jashley73 View Post
    I reached out for a quote for a business liability insurance policy, that would cover accidental damages when working inside a customer's plant and/or programming CNC equipment.

    .................................................. ..........................................

    Thanks
    J', seriously, how realistic do you think it is that customers would let you play on their equipment in their shop, liability insurance or not?

    One of my concerns would be in case you did damage I'd be left fighting with your insurer. And, how often do shops have equipment sitting idle for you to play on (would it be done in prime daytime hours or late night)?

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    Quote Originally Posted by TeachMePlease View Post
    It's all a scam. I recently built a new house. I picked the lot I'm on because I don't need flood insurance. For the same house on a lot literally across the street, I would have. It's a scam.
    Having dealt with this and now being all to familiar I can tell you that yes...one house must be covered to get a mortgage and the house even 5'away, right next door will not need be covered to get a mortgage. Why...well a line needs to be drawn somewhere. Sometimes its heavy topographical features that lays it out...sometimes its elevation and distance from coast, creeks, run off streams etc.

    A one handed blessing if you need not have to pay it, another story if water rises and you do not have insurance...lack of insurance is also an issue if you need to apply for additional help where your standard policy drops off.

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    Quote Originally Posted by Doug View Post
    J', seriously, how realistic do you think it is that customers would let you play on their equipment in their shop, liability insurance or not?

    One of my concerns would be in case you did damage I'd be left fighting with your insurer. And, how often do shops have equipment sitting idle for you to play on (would it be done in prime daytime hours or late night)?
    Well, to be frank, I'm not asking to "play" on their equipment. Nor rent it out. Providing a (paid) service, part of which is programming.

    As to the "unlimited risk" of crashes, etc... - Yeah, I see that. Which is why some form of agreement would need to be signed as to when the customer accepts responsibility of the project. This would most likely be agreed upon, when agreeing on the scope of the project, etc...


    Regarding idle machinery - yes, and it won't be getting better any time soon. The skills shortage is much to blame for this.


    Carrying the insurance policy sends a pretty strong signal to a customer that I'm taking myself, the project, and their money quite seriously. Contrast that to a fly-by-night mechanic or house-painter type, with nothing but a hand-shake. Which one would you trust to work within your business?



    I'm a little surprised at some of these responses. Do you all really think I'd be the first insured, free-lance CNC programmer out there?

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    Quote Originally Posted by alphonso View Post
    I thought Florida was a flood zone.

    Yes, I suppose it is, BUT according to the flood zone maps, lots and lots of areas are in the '500' zone, meaning no floods in 500 years...

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    Quote Originally Posted by TeachMePlease View Post
    It's all a scam. I recently built a new house. I picked the lot I'm on because I don't need flood insurance. For the same house on a lot literally across the street, I would have. It's a scam.
    I agree, but things do happen. I had some damage to my property in the last hurricane (not water), while houses all around me were fine. Not even branches down in their yards, but I lost half a tree.


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