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Old 02-05-2020, 12:40 PM   #1
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Default So this is kind of huge. . . .

Since I operate as an LLC in California and a lot of the laws here are asinine, I'm required to hold a $100k bond to cover my employee's wages because I'm a scumbag and I probably won't pay them.

(Oh wait, I don't have employees)

Anyway, I've been paying $5,000 a year; well over the standard (1% to 3%) range of a bond for 2 years now. The first year I knew it was going to be tough to get one at a good price because of the risk factor of a brand new business. They assured me that it would go down after the first year.

Year 2 rolls around and I make the call, what kind of better rate can you get me on this bond that I don't even need? We're not going to be able to get you a better rate because of your credit score. Granted my wife's credit is a bit lower than mine, but I don't feel that either of us had credit at that time so horrible it would warrant 2% higher than the normal maximum. At that point it was late and I just needed to renew it. I chalked it up to cost of business and promised myself I would get after it early next year.

This year when January rolled around and I started getting bond renewals in the mail I got on the phone with these people and it took them about 4 days to come back to me with $3700.

My credit score is nearly 800. I am offended.

I started price shopping and ended up getting this bond for $1800 through a company I found on the internet.

I'm not too worried about the quality of service because 1: I have no actual need for this bond and 2: They aren't REALLY doing anything for me other than sending a renewal notice every year. Hell, I can mail myself a renewal notice.

I'm super excited about what this means for my business.
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Old 02-05-2020, 12:45 PM   #2
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good deal on saving $$$$$....



I always shop around for pricing, on that bond any piece of paper will do as like you said..you dont need it...
but for liability insurance you dont want a fly by night place...you want a name brand insurer to back you up when needed..
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Old 02-05-2020, 12:57 PM   #3
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I'm not the only one with a bunch of crazy rules. My bond here costs 50$ for 20K.

I did get my membership invoice today, 900$. I'll get the licence renewal invoice for another 500$ in a couple of days.
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Old 02-05-2020, 01:11 PM   #4
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Quote:
Originally Posted by ShtRnsdownhill View Post
For liability insurance you don't want a fly by night place...you want a name brand insurer to back you up when needed.
That's 100% my feeling as well. I've put out feelers to internet insurance brokers, and they all come back with "This super low price"

When I look at the coverage it's a disappointment, and they don't cover things like using a torch or installing LP/NG lines &/or appliances.

One thing is for sure this current insurance agent of mine can go chew on a beer can.
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Old 02-05-2020, 02:12 PM   #5
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Quote:
Originally Posted by Alan View Post
That's 100% my feeling as well. I've put out feelers to internet insurance brokers, and they all come back with "This super low price"

When I look at the coverage it's a disappointment, and they don't cover things like using a torch or installing LP/NG lines &/or appliances.

One thing is for sure this current insurance agent of mine can go chew on a beer can.

I have merchants insurance company for my business liability for at least 15 years..they arent the cheapest but they have better coverage than some cheaper ones and the certificates of insurance , even for additional insured are covered in the annual premium ...
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Old 02-05-2020, 02:14 PM   #6
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when did California start that? I moved to IL in 2013.


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Old 02-05-2020, 02:28 PM   #7
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Quote:
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when did California start that? I moved to IL in 2013.


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As far as I can tell, contractors weren't allowed to be LLC's before 2010. I think requiring this bond for new LLC contractors was part of the bill that was passed.
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Old 02-05-2020, 07:52 PM   #8
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Probably two years ago I got pizzed at my insurance company so I decided to switch. Went with progressive because they had the best rate for my cube. Six months later I got a letter in the mail asking for my workers comp. I told them I don’t have any employees and if something were to happen to me workman’s comp would be useless. But it’s there policy.... the wanted my pay an extra $700 for WC to save $800 a year.

Don’t know why I didn’t think of it first, but I called my personal insurance company to see if they would insure my cube. Not something they normally do so they had to call me back. About half the price of progressive and no need for WC!

Early mistake, lesson learned.
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Old 02-05-2020, 08:01 PM   #9
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Worker's comp here does not cover the owner for the basic $1500 a yr policy. The rates for the owner are so outrageous I have never insured myself. I pay more than $30,000 a year for my employees in w/c......
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Old 02-05-2020, 10:06 PM   #10
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When I had a shop in L.A. my wife's Insurance Company carried our Insurance
W/C & Liability both, It cost more for the Plumbing, then our Electrical,
Gen. Building, and Alarm Divisions combined, It cost more then double that
for our Fire Spingler Division which we did not Insure

The Insurance Co. said that Plumbers get hurt more often, and can have more damage claims
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