Barnwood Salvage Business

[creativehardwoods]

I have a reclaimed lumber and furniture company that has been in business for 7 years and does very well but so far have not carried any insurance. My business partner and I have dismantled and salvaged old barns since we began along with purchasing barn wood materials from others. I would like to be able to employ help for tear downs but when we first started we got a work comp quote for payroll of $25,000 per yer and it was around a $1000 per month and no offer on general liability. $1000 per month to provide work comp on one worker just didn't seem worth it. Curious if any body here has any experience working with barn wood salvage companies. Hoping to get some advice as to the most affordable way to set up work comp and gen liability insurance for salvaging old barns.

Thank you in advance

 

[AZDave]

First, you need an to find an independent agent that understands construction risks. For work comp, the only market available will be thru yours state's assigned risk options, most likely the application will go thru NCCI, and 'assigned' to a participating carrier, such as Travelers. The 'rate' is based on your scope of work and is given a 'class code'. In AZ, your class code most likely would be 5645, with a rate around $22/$100 of payroll. The rate is set by NCCI, so no sense in shopping it. Where work comp gets messy, is if you use any uninsured sub contractors, or members failing to exclude themselves, or cheating on your payroll totals. But the rate is the rate, based on scope of work, and based on verifiable payroll. If it's 22%, or 50%, there is no lowering it. You must understand it and price it into your work.

For the general liability, your premium will be based on your exposures. Exposure for the demolition will be based on total payroll or gross receipts, and sub expenses. Exposure also needs to be included for the end products and manufacturing. You want to make sure your policy does include products/completed operations, and depending on what your making it may or may not be affordable. The underwriting will involve information about what your making, where your making it at and how your selling it. On premise sales, distributors, internet, all factor in.

Your markets are limited for general liability too. Your agent will submit your account thru a surplus lines brokerage that has access to carriers that insure your type of risk.

Bottom line, you need to get a carrier and an independent agent that has contemplated and will cover your activities. Or call a captive agent, like State Farm, Allstate, American Family, Farmers who will insure you like a normal retail furniture store and not care.

 

[marksinsurance]

I agree with AZDave. This is a non-standard risk, and from the look of things, the GL premium will be perhaps too high for you creativehardwoods.

If you go the 'standard' route that Dave suggested, Or call a captive agent, like State Farm, Allstate, American Family, Farmers who will insure you like a normal retail furniture store and not care. " - you run the risk of claims being denied, if there you get to that point.

I think Dave's advice to get a local independent agent's advice is sound - the problem there is that you will be hard pressed to find an agent with experience with that niche. Good luck.