Small bussiness insurance question | GTAMotorcycle.com

Small bussiness insurance question

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Brit Biker

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Small business. Sole Proprietor. No Employees. Semi Retired. Approx 2 days per month.

Millwright repairs to machinery. What type of insurance is needed. Any recommendations
 
That's a tough one I would bet insurance will be more than 2 days a month can make. Should get Incorporated to isolate yourself from the business and see what commercial general liability costs.

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I'm going through this right now. Unfortunately I lean towards the paranoid side of things.

If you're talking car insurance it's easy to get coverage for a bit of commercial driving. I pay about $50 for up to 4000 kms a years for business use of my vehicle.

For liability there's no easy out. If you are working as "John Doe" John Doe can get sued if he makes a mistake that causes damage / harm. While you can theoretically get an agreement with the person you are working for that you are not liable for damages to their property a third party may get involved and you have no agreement with them.

If things go sour the legal costs can be negate any gains and more.

If you incorporate ($1500 -$2000) your personal assets are largely protected. You have to add some accounting costs to the mix (A few hundred dollars?) and deal with WSIB for a few percent of what you make. You theoretically don't need insurance other than to protect your assets which you can minimize by keeping them in your personal name. Lease / rent them to your company if you want the extra paperwork. Keep the vehicle in your name and pay yourself mileage.

Insurance for a part timer could be very expensive if you can get it. Underwriters are also paranoid and see small operations as skimping on safety.

Since I have no desire to start another business I only work as a part time employee for legit companies. It works for me. It's a big enough pain in the arse to discourage them and I don't want to work that much. Working a day or two a month pays for my vices. I'm covered under their WSIB and insurances. I get a T-4 to keep Justin happy.

Obviously I would pocket more $$ if my name was on the cheque.

A lot depends on the rules governing your trade, unions, etc.
 
Brit Biker said:
Small business. Sole Proprietor. No Employees. Semi Retired. Approx 2 days per month.

Millwright repairs to machinery. What type of insurance is needed. Any recommendations
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Contact WSIB to discuss your options. You might opt out as an owner, the people you work for may not like that.

Talk to your auto insurer if you use your vehicle to go to jobs or transport tools equipment or parts. They probably won't care, but it's good to have it on the record.

General liability is worth having. I pay $181 for $2million. Any broker can help.
 
I have an incorporated company with general liability and errors and omissions insurance. No claims ever. A few years ago, with a 1,000,000 limit each, I was paying ~$1000 a year. Then a client need GL @ 2,000,000 so premium jumped to ~$1400. Then the same client needed GL @ 5,000,000 so premium jumped to ~$4000 (this client has a blanket policy that all contractors/consultants need at least 5 to work with them regardless of how small the risk is for a specific contractor/consultant). I think I am hitting minimum policy limits so insurance is disproportionately expensive. You will have the same problem. Your revenue (and their exposure) could increase by an order of magnitude and your premium would likely be unchanged.

As for WSIB, setting it up when you don't have employees isn't as easy as it should be. You need a client to force you to get it and then they will let you setup a voluntary WSIB account. You have to prefund it with ~$250. You report quarterly and they draw from that retainer. I set it up with the minimum possible income (~$30K IIRC) as I don't care about the security, I just needed the clearance certificate. If I were you and clients weren't forcing you to provide a clearance certificate, I would not bother with WSIB.

I understand the appeal of working for yourself, but for two days of revenue a month, the administration cost is quite high. Presumably you have been around the field for a long time, do you have someone you could wash this through? You bring the client to Company A, you do the work, company A issues the invoice and collects the money and pays you as an employee. You are in a slightly shady area of contractor vs employee, but if you structure it properly it should work (eg. Company A sends you an email letting you know that you need to work at site X at a specific date and time, your hourly rate would be a number, but the number would be derived as a % of the rate billed to the customer.)

EDIT:
Based on MM's price, maybe I need to get some more insurance quotes again. What a pain in the %^@.
 
Just waiting for my Insurance guy to get back to me.
Company I'm retiring from want to use me as a part time contractor as well as a few customers of my own.

I just want to work part time to keep my mind and body active as I enjoy doing this type of work.
 
GreyGhost said:
I have an incorporated company with general liability and errors and omissions insurance. No claims ever. A few years ago, with a 1,000,000 limit each, I was paying ~$1000 a year. Then a client need GL @ 2,000,000 so premium jumped to ~$1400. Then the same client needed GL @ 5,000,000 so premium jumped to ~$4000 (this client has a blanket policy that all contractors/consultants need at least 5 to work with them regardless of how small the risk is for a specific contractor/consultant). I think I am hitting minimum policy limits so insurance is disproportionately expensive. You will have the same problem. Your revenue (and their exposure) could increase by an order of magnitude and your premium would likely be unchanged.

As for WSIB, setting it up when you don't have employees isn't as easy as it should be. You need a client to force you to get it and then they will let you setup a voluntary WSIB account. You have to prefund it with ~$250. You report quarterly and they draw from that retainer. I set it up with the minimum possible income (~$30K IIRC) as I don't care about the security, I just needed the clearance certificate. If I were you and clients weren't forcing you to provide a clearance certificate, I would not bother with WSIB.

I understand the appeal of working for yourself, but for two days of revenue a month, the administration cost is quite high. Presumably you have been around the field for a long time, do you have someone you could wash this through? You bring the client to Company A, you do the work, company A issues the invoice and collects the money and pays you as an employee. You are in a slightly shady area of contractor vs employee, but if you structure it properly it should work (eg. Company A sends you an email letting you know that you need to work at site X at a specific date and time, your hourly rate would be a number, but the number would be derived as a % of the rate billed to the customer.)

EDIT:
Based on MM's price, maybe I need to get some more insurance quotes again. What a pain in the %^@.
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Yikes to your GL premium. A sole proprietor will pay a lot less than an corporation.

I just looked at the insurance bill for my sons service biz, it is $330 for 2m and $500 deductible.
 
nobbie48 said:
...
If you incorporate ($1500 -$2000) your personal assets are largely protected. You have to add some accounting costs to the mix (A few hundred dollars?) and deal with WSIB for a few percent of what you make. You theoretically don't need insurance other than to protect your assets which you can minimize by keeping them in your personal name. Lease / rent them to your company if you want the extra paperwork. Keep the vehicle in your name and pay yourself mileage.
...
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:I incorporated in 1979
it cost more then that.

... was also well worth it, self employment is awesome if you are very employable.
 
Call Hub International. They specialize in single day, multiday insurance and other quirky schedules and uses. I had to use them for 1 day insurance for a finicky client. Seemed reasonable.
 
Mad Mike said:
Yikes to your GL premium. A sole proprietor will pay a lot less than an corporation.

I just looked at the insurance bill for my sons service biz, it is $330 for 2m and $500 deductible.
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And he is actually spending most of his time at clients sites and his work has the potential to damage people or property. I very rarely need to go to a site and my work has a very very low potential to damage anything. Oh well, that can be a project for next week.
 
sburns said:
Call Hub International. They specialize in single day, multi day insurance and other quirky schedules and uses. I had to use them for 1 day insurance for a finicky client. Seemed reasonable.
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That's who we use too.

Corporations are sometimes expensive based on the coverage you're after. A sole proprietor's needs are a lot simpler.
 
Trials said:
:I incorporated in 1979
it cost more then that.

... was also well worth it, self employment is awesome if you are very employable.
Click to expand...

Using a paralegal I incorporated in 1989 for a grand. I spoke to my lawyer last week and he gave me the $1500 number for a friend interested in becoming an electrical contractor. he also mentioned that one should use a legal firm familiar with the nature of the intended business. Apparently a number of changes happening in the construction field.
 
Mad Mike said:
Contact WSIB to discuss your options. You might opt out as an owner, the people you work for may not like that.

Talk to your auto insurer if you use your vehicle to go to jobs or transport tools equipment or parts. They probably won't care, but it's good to have it on the record.

General liability is worth having. I pay $181 for $2million. Any broker can help.
Click to expand...

I thought WSIB stopped the owner exemption and my insurance was ten times that.
 
nobbie48 said:
So if the owner of the roofing company falls off your roof he can sue you?
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Anybody can sue anybody, proving negligence on the part of that other person is the catch.
 
Trials said:
Anybody can sue anybody, proving negligence on the part of that other person is the catch.
Click to expand...

If the person who falls is covered by WSIB they have to seek compensation from WSIB. There is a messy world of people with clearance certificates subbing work out to ones without clearances.

WSIB is a double edged sword for both parties. Because they cover the losses companies don't fold to avoid liabilities and workers don't have to sue companies that could shut down. The other edge of the sword is the bureaucracy.
 
I incorporated 25yrs ago, I believe it was about a grand then, but it was to limit my personal exposure should something go wrong. My insurance is more as a coporation since there is more exposure to the insurance company (they cant sell my house and RRSP's to cover a suit). Insurance premiums are based on what you do, where you do it and historical data. My insurance is 960.. per yr. I do site visits, no one comes to my place of business. Filing my taxes costs about $350. for the accountant.
My hobby business needs $1600/1800 per yr to cover expenses. Its mostly worth it, I may ramp it up if I retire.

Insurance is largley priced on the liability risks so i'm told. My pals Corporation is simply a holding company that holds shares of his business, he pays no insurance, my YC running a sailing school pays 12k.
 
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