# workmans comp



## darkstar (Mar 1, 2005)

I have been in business several years . I out right own only ,one chipper, one box one dump, a new Holland ls180 steer skid loader , and one good f 700 dump .and of course about 12 saws and various tree gear . Ive been paying cash for all equipment and started to really build my business about 3 years ago when i got married .Its been going well . I always 1099 my 3 regular workers 2 climbers and one ground man . Recently i began thinking of insuring my crew and witholding .In my state we are only required to have workmans comp if we have 5 or more full timers . I checked into rates and have found it will cost me 39 dollars for every one hundred i pay each worker . There is no way i can afford that at this time . How many of you all carry workmans comp and how CAN you afford it and still be reasonable in price . ?  baffled .... 390 .00 us dollars per every thousand ... last year i would have owed workmans comp close to 40000 if i reported everything accurately... AND at that rate i could not compete i pay my ground man 100 a day and my climbers 150 a day . they always show up and really work well ..... For now i will keep 1099 ing but i sincerely want to provide my crew with some benefits ,good pay and a future ..... ANY ADVICE ?


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## darkstar (Mar 1, 2005)

*.*

sorry about the english errors and spelling etc . 20 years running saws havent done much for my grammer ...


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## alanarbor (Mar 1, 2005)

I'd be careful about your liability to your "subs" If they are working for you over a certain amount of hours, you may be required to cover them as an employee with WC. I'm not sure, but I have heard of some issues around that. You may want to get some advice from a business Attorney to help you make some informed descisions....


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## darkstar (Mar 1, 2005)

*subs*

Yes i have checked with my local BBB. As long as i can prove that my subs work their own jobs and hours and provide some of their tools ,i am riding the line between sub and employee .So far its the only way i can opperate as several of my competitors are doing exactly the same thing . What i really want is to find workmans comp for less ...haha


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## Ax-man (Mar 1, 2005)

WC bites doesn't it, you won't be competitive if you start carrying the insurance and your competition elects not to carry it, this is why there is always such a wide gap between the high bid and the low ball bid, the playing field is not level.

1099 are for subs, from what you are describing these guys are employee's not sub's. If one of them was to get hurt seriously on the job and they don't have their own insurance, guess what will happen, first they find a shark (comp lawyer ) and sue you, they will take your business, personal assets, anything of tangible value to satisfy the judgement, if that is not enough they go after the property owner where the accident occurred, mostly likely they will have insurance and they go for the deep pockets, it is all about money. That is how it works here in the good old Land of Lincoln.

WC is there to protect you and your clients from these types of lawsuits in case a worker gets injured. On the reverse side it also helps the injured worker, but unfortunately the whole darn system has gotten out of hand and has been abused that we have lost sight of the original purpose for carrying WC in the first place, I don't how it is in Tenn. but here in Ill. it is the law that you carry the insurance, but that has never stopped the hacks and lowballers from competing in this business.

I could go on and on too, this is a very very sore subject to me.

Larry


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## tophopper (Mar 1, 2005)

1099's and work comp have nothing do with each other at all. Personally, if I were you, Id be ashamed to admit Ive been going without required ins like WC. You OWE it to your employees to have it and by not having it and exposing workers to our potentially dangerous industry, well, what does that say about you and your business.
I dont mean to sound harsh, but get the coverage, you NEED it!!


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## darkstar (Mar 1, 2005)

*i know*

i know i need it but how can i pay 39 on every 100 earned ? lets see on an average day i pay 2 climbers 300 and one ground man 100 so total is 400, in labor, i only make 250 for chipper , dump , advertising , liability etc barely nothing .total of 650 ... anyhow my wc fee on 400 is nearly 160 on only one day [so 650 job ] plus 160 workmans comp would be[ 810 ]. no way can i even come close to the other estimates .... i could however pay my guys less ...bummer for them ... or charge more and just work them part time since i would not get about half the jobs i get now ... and suppose one of them does get seriously hurt ... i can still be sued ... id rather pay health for my guys then at least they would be truly covered .... wc pays very little .... 
i understand i do need wc however .... how can i get it cheaper anyone ?


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## darkstar (Mar 1, 2005)

i guess the bottom line for me is ...i started out with 2 chainsaws alot of expierence and one old pick up ... less than 3 years ago .. now i own what i mentioned above and buisness is getting good ... but its gonna be hard to make a transition where i increase my estimates by 30 % ... i cant see surviving that ..


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## alanarbor (Mar 1, 2005)

Let me get this right, you are at $810 for a three man day? With WC? If you don't mind my saying so, that's dirt cheap... under $35/man per hour.

When you run this 3 man crew, do you have to be out with them, or are you out getting new business? If you're business is coming from referrals, and word of mouth, your business is much less affected by the lowballers than you think.

If you are always trying to win jobs on price, you are killing yourself. It's a necessary evil to get yourself going sometimes, but if you are going to take the next step with your business, you will have to accept some serious discomfort. If you have set yourself apart by giving clients service that "wows" them, you will not have to worry too much, they will gladly pony up for you. If even your repeat "loyal" clients still go for multiple bids every time, I would evaluate how you are serving them, and see what changes you can put into practice get and keep their loyalty.


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## MasterBlaster (Mar 1, 2005)

darkstar said:


> lets see on an average day i pay 2 climbers 300 and one ground man 100 so total is 400, in labor,



That don't sound right, to me. One climber and two groundies is more the norm. Two climbers would keep one groundie buried. And that's $50 ( or $13,000 annually) more crew labor, also. Saving that would help to pay your comp.


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## darkstar (Mar 1, 2005)

well i go for the 2 climbers , as the climber , on the ground, is an excellant groundie ... yeah i know 35 an hour is cheap and no im not a low baller .. no where close ... i worked in maine and N.E. your prices are much higher in the north ... im here in old dixie, in chattanooga ... but i get the message here you all are paying 35 to 39 per 100 dollars on your employees for wc. ok ill make it happen


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## MasterBlaster (Mar 1, 2005)

darkstar said:


> well i go for the 2 climbers , as the climber , on the ground, is an excellant groundie.




Yur lucky, bro. _That's_ an ideal situation!


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## Lumberjack (Mar 1, 2005)

I am even deeper in dixie (down here with butch) and I get $125 an hour with my basic setup. I have a 1987 1/2 ton, 18' trailer, and the regular climbing and rigging gear. It sounds like your a low baller based on what you have compared to what I have, and what i actually get.

That is for me and 2 groundies. I am getting a 1 ton soon, looking at a 99 model now, a chipper, dump trailer, maybe a GRCS, and front end loader for my Ford 3930 all this summer hopefully.

After i get the gear from above, depending on what chipper i get and all, i may be up to 200 an hour plus, depending on the job.


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## ORclimber (Mar 1, 2005)

Darkstar, Have you looked into running your guys through a service? Like a labor ready, etc. They may be able to offer better rates.


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## darkstar (Mar 1, 2005)

*.*

lumber jack . do you carry workmans comp ?
i have checked the temps . whoa way more $$$$


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## TreeJunkie (Mar 1, 2005)

I can understand being in a lower income area. I've worked down south a few times as well as in more rural areas of kansas where cost of living is much lower than where i live. But my god man! No matter where you live the equipment costs the same, as does the insurance and i'm pretty sure that it's just as risky a business where you are as it is here. 
In k.c most credible operations are charging 75hr for a climber, and 50-65 hr. for an experienced groundie. If you charge less than 50 an hour here in town your a low baller/hack. All in all for a 3 man crew w/ that kind of equipment you should have no problem pulling approx. 1,500 a day.


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## Newfie (Mar 1, 2005)

darkstar said:


> but i get the message here you all are paying 35 to 39 per 100 dollars on your employees for wc.




Or more. Last quote I got in Mass was $59 per $100.


How can you be making any money at the rates you charge?


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## Treeman14 (Mar 1, 2005)

Most small companies in Florida cannot get coverage for less than $80 per $100. You have to go through a leasing company for rates around $50 per $100. You have to put things in the proper perspective. $40,000 a year seems like a lot of money, but think about how much a major medical (or fatality) claim could cost you.


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## trimmmed (Mar 1, 2005)

Welp, I guess I'll just quitmy?????in about paying $26 on $100 for carpentry, these numbers are scary :umpkin:


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## clearance (Mar 1, 2005)

Crazy rates for you guys, up here in B.C. Canada I think that the base rates are all under 10% I think that construction starts around 5 bucks per hundred paid out, logging is around $7 and your rates go down for each claim free year. When I cut myself spacing my boss was choked cause it put him slightly over 10%, and this was after other wage loss claims he had that year. Up here everyone ?????es about the workers comp. and in many cases rightly so, but you guys are getting robbed.


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## tinman44 (Mar 1, 2005)

my new company (founded in jan 2005) is having problems finding insurance. i tried an internet site where they boasted ppl would call me and compete for my business but no calls yet. so any ideas about insurance? (liability insurance 1mil would be right)


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## Lumberjack (Mar 1, 2005)

No, I carry general liability.

Right now we are all still young enought to be covered under out parents insurance. If i get just get a chipper and dump trailer I will probably be charging close to 200 an hour.

One thing I thought of is perhaps your just working awfully slow. That is the only thing i can think of. We constantly make 115-125 an hour. Sometimes it gets down to 100 but thats rare.


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## DDM (Mar 1, 2005)

Tin, Commercial tree insurance is hard to get the company you emailed probably doesnt handle tree's. Hartford might insure you. You'll probably have to have verification of 10 yr's experience.


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## John Paul Sanborn (Mar 1, 2005)

I only skimmed the thread, so sorry if this was asked already; how many quotes did you get to come with a 39% of payroll? Here in WI the state pool is 22.14% (I heard that Cali is like 55%) many private policies are less.

Is your salery in the payroll? Most owners get self exemptions.

Most policies start out high then go down as you work without any claims (many guys I know self insure the small Dr. visits, like sawdust in the eye, just to avoid the claim).

I think if you hunted around you could get a better rate.


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## Ekka (Mar 2, 2005)

Well, over here in Oz the state govts run the wc to stop private company rip offs, the worst I have heard of is 17% and I pay 2% because no claims in 6 years. You start at 6% if you have no adverse history.

We also have a web site where the consumers (yes customers) can run your business number with the govt to check on your insurance, just like that, instant, bingo or your busted! :Eye: And I tell all the customers so it makes my chances of getting the job better when they see that my competitors are full of crap. Not to mention that I run competitors thru the system and dob them in.

Contractors including climbers who bring their own gear still need to be covered as the wc govt ruling states their predominant supply to you is labor, they do not bring significant machinery (like some-one stump grinding for you).

Yes, the step from climbing etc to running a business is significant, so are the costs and responsibilities. You have to put your prices up and like I've said elsewhere be prepared to work for the change, when you do a $1000 you may end up with $250 ... welcome to the business world.

Price according to your cost/profits etc. Often customers tell me "oh yeah but so and so can do it for $200 less will you match it?" I'll let you answer that one but remember, why work for nothing when you can go broke sitting at home.

So often good tradesmen go it alone and fail, it takes more than being a good tradesman to run a good business. Many end up going back to the tools and frankly are better off. How many of you guys have earned less at the end of the day than your highest paid worker? 

Turnover is vanity, profit is sanity. Do it right and price it right according to your skills, equipment and overheads and you'll be ok.

Over here we also have to pay 9% compulsory superannuation ontop into the workers super account. How many do you think break that rule, well I dob on that too, so slowly the low ballers get out or get busted.

We also have tax office hotline dob ins for dodgey cash deals, that's a treat for doorknockers, try get their rego and details and dob them in.


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## Stumper (Mar 2, 2005)

Ekka, I realize that reporting all of your competitors for their "violations" is in your own self-interest on one level but have you considered that you are helping to consolidate power in the hands of freedom quashing government meddlers? :angel:


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## tinman44 (Mar 2, 2005)

DDM said:


> Tin, Commercial tree insurance is hard to get the company you emailed probably doesnt handle tree's. Hartford might insure you. You'll probably have to have verification of 10 yr's experience.



luckily my partner was in the business for 17 years in iowa before he came to ga so we should be able to get insurance


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## darkstar (Mar 2, 2005)

GOOD NEWS ,since i have been turned down for wc from 2 companies i am applying directly through the state of tennessee . my rate is 22.68 + several charges that apply at the start . this is good news as one insurance company quoted 39.00 dark


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## alanarbor (Mar 2, 2005)

A couple of key points to help keep your WC low.... 

1.) Don't let anyone get hurt (I know, DUH!)

2.) Have an employee manual with a clearly outlined safety policy, and enforce it.

3.) Have a documented safety training program.

4.) see #1

I'm not trying to pimp TCIA here, but if you're a member, they have lots of resources to help you establish the above. As you move forward with your business it may be worth joining. There are some other resources availible on the web as well.

Tree Care Industry Association 

Employee handbook template (not free) 

Some tips on writing an employee manual 

And also I'm sure you can ask other members on this site how theirs is set up.


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## darkstar (Mar 2, 2005)

I am member of the isa but not TCIA . Thanx for the replys,looks like we will be covered by the end of next week[except me]. I will try and raise bids over the next month and use w.c. as a selling tool . Appreaciate all the helpful info.


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## Dan Flinn (Mar 6, 2005)

Hey Darkstar...

I feel your pain. I paid .42 on the dollar for WC. What put me out of business is when WC charged me for the dollar amount I paid for subs.

I contracted for wood removal. He mostly removed the good stuff for free, but charged for the stuff he had to take to the dump. The last year I was in business, I had about $3500 in wood removal expenses. Do the math and it comes to a little less than $1700 for WC. The kicker is that they charged me at the .42 rate - not the rate for a guy that sits on a truck and loads wood.

Anyway, when I got the bill for the next year that was around $4000 due and payable, my decision was made. Poor cash flow management and I couldn't pay that bill. Now I work for other companies that have it.

I can tell you that My rates were $50 to $55 a man hour for my truck and chipper. I saw that you are a member of ISA - are you certified? The day I became a certified arborist, I went from competitive bidding to "just do the work and bill me". I don't want to start the old argument about the certification, but I can tell you that it was well worth the time and cost.

I, too was small - F700 and a bandit chipper and 3 helpers. I was "part time" as I worked for the fire department.

I guess what I want to say is that I commend you for adding wc. In my area, there are only a few companies that can sustain it - and they charge for it. Mention it to your customers when you give the bid, they will appreciate it.

Dan


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## begleytree (Mar 6, 2005)

Go ahead and sign up for W/C. It won't take long for offers to come in to join groups.
Mine started at .56 for every 100 of payroll (and I self cover) group dropped it to .17 for every 100. Also, please look into setting up your co as an LLC, its easy, and it shields YOU from personal liability in the event of a lawsuit, and keep/put most of your equipment (at least whats paid off) in YOUR personal name. Helps to keep it where it can't be touched. Keep your payment equipment in the LLC'd co name (there's really no equity to go for on it) then when paid off, sell it to yourself for $1. (and change the title)
-Ralph


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## hobby climber (Mar 7, 2005)

Liability insurance to protect the customer, w/c to protect the employees, and Incorporate your business to protect you and your family. or something like that ... you get the idea. HC


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## vharrison2 (Mar 11, 2005)

In Florida you have to carry it. We use a leasing company for our employees to get a much better rate. The leasing company does all the payroll,wc. We use First Financial. Their number is 1-800-624-1805


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