Just get laid off? If you’re anything like me you probably spent a few days mourning, and then once you got tired of sulking you started making a list of all the things that needed to be done around your home that you’ve been putting off because you were too busy working.
After you completed your list, one by one, you knocked out each chore and every one of them came out awesome. You’re feeling really good about yourself. There is nothing you can’t do. You’ve been a machinist for the past ten years and you’ve forgotten how great it feels to work outside. The house is looking so good that you decide to throw a little party and invite some of your buddies and neighbors over for a Saturday barbecue. Everyone is impressed and surprised at the quality of the new paver patio you installed all by yourself. Your wife is talking you up to her bosses in the office and her boss offers to pay you to install a patio at his house. Why not? You’re unemployed you’ve got nothing else to do. So you do it. You take your time and do a fantastic job. Your wife’s boss is pumped and he pays you $2200 for the job that took you 3 days. After material expenses you figure you’ve made at least $1500 profit. Simple math tells you that you made $500 a day profit! Hell at the machine shop you were only making $500 a week. It’s this moment of realization… this defining moment when you say to yourself… “I’m never going to work in a machine shop again.”
You’ve decided to go into business for yourself. You’ve even come up with a snazzy name for your company. “Patio Daddy.” The only problem is you’ve never run a business before but hey, how tough can it be? As long as you have work… you’re all set.
The first six months are great. You’ve already made 3 times what you ever made as a machinist. You’ve done all this with flexible hours and all your customers have loved you and your work and they’ve been recommending you to all their friends until… You’re installing one of your kick ass patios for one of your wife’s, bosses best friends. He’s a big time lawyer and price is no object he wants a huge patio because he hates grass. There are so many patio blocks needed for this one you figure you better rent a skid steer. Everything is going great. You’re spotting your pallets of patio block around the work area with the skid steer. You set a pallet down and back out of the pallet quickly….. Bang!! You back right into the above ground Koi pond your customer told you to watch out for.
The water flows quickly out of the pond carrying your customers prized Koi into the middle of the back yard. You inadvertently run over a few of them with the skid steer and in an instant they are reduced to road sushi. Oooops.
Your customers are not too happy. Apparently Koi are some kind of expensive assed mutant goldfish and the above ground pond in which they swam was built by the best guy in the business. Total Damages: $25,000. As I said the customer was not too happy but they’re relatively calm until they ask about your liability insurance company and you respond with an intelligent…”Huh?”
Many new contractors don’t even give liability insurance a thought until it’s too late. Liability insurance is something insurance companies love to sell because it goes largely unused. In my twenty years of self-employment I have only had to use my liability insurance once and the claim was not even due to my negligence. I removed some gutters from an ocean front home. The day after I removed the gutters was an extremely windy day. The wind blew approximately 10 sq. ft. of roofing off the home and onto a car down below. The homeowner and the owner of the automobile both filed a claim against my insurance co. I wasn’t worried because there is no way the adjuster would say that this was my fault. Well believe it or not the adjuster sided with the plaintiffs and gave them about $1600.00 in damages. You see, this was such a small claim that the adjuster didn’t care. He would pay these people their pittance and then raise my premium. I had no recourse. Their decision was made.
If I didn’t have liability insurance I would’ve have had to pay for the roof and the damages to the car out of my pocket if the plaintiffs could prove the damage was caused by my negligence. If I did have to pay, it wouldn’t be such a large hit. One patio would take care of it. But what if you had to pay for the damages to the Koi pond? Patio Daddy would be out of business in a hurry. But what if the Koi pond were not a Koi pond at all, but rather a three foot pool filled with toddlers? Scary thought huh?
Insurance companies love selling liability insurance because it rarely gets used. We continue to purchase Liability not because it glitters like a finely cut diamond or purrs like a BMW…No, what the insurance companies are selling us is…Peace of mind.
