Insured Plumbers Vs Jacklegs

**master plumber mark** · 07-13-2006, 05:43 PM

People wonder why plumbers charge what they do.....

One big expence for REAL PLUMBERS ACTUALLY IN BUSINESS IS

<<<INSURANCE>>>>> and plenty of it.......

Just wondering what the average insurance coverage

is for most plumbers in business in the USA...

and we are S incorporated

you are going to have to chew through a lot of money before

you take a bite out of my hide....

**coach606** · 07-13-2006, 06:01 PM

I suppose you need a lot of insurance to protect yourself and your family.

But I've never known anyone who sued their plumber. That's not to say it can't and doesn't happen. But it must be somewhat rare. Heck, the developer who built my condo never brought some items up to code. He told me flat out that the city will either make him change things or not, but he's not doing it because I'm mentioning the code. We had tons of problems and we never sued. Our condo president was a lawyer for the City of Chicago. You know what he said? Lawsuits were costly, risky crapshoots. Lots of people wanted to sue this developer, but we consistently realized it wasn't worth it. I still made out great on the condo.

Our teacher's union has over a million dollars in insurance to cover anything that happens in a classroom when kids are in your charge.

I'm usually glad I have the insurance I do, but I occassionally think that it's a bit paranoid.

Anyone else?

**Dunbar Plumbing** · 07-13-2006, 07:07 PM

When I first opened shop I had 2 million in coverage. Now, I have state minimum. I didn't do it because of cost or my low callback ratio.

Why would I want to give an open checkbook to anyone who wants to fatten their financial portfolio?

When you burn down a million dollar home, figure another million to cover furnishings and all of that other stuff in with compensation for the loss. You give a lawyer a fat insurance policy and you'll be paying through the nose when you get cancelled and have to look for another. Then you will be going after the minimum requirements.......not by choice but by the fact you can't afford anything else.

I was told to go this route with state minimum for the fact that I am a S-corp and double doors are the norm in this setup.

I do not agree with LLC's. I hate the word "limited liability". Hard words to overcome if you are a customer entrusting your service provider.

I pay $700/year all at one time and I figure that's just part of business.

**master plumber mark** · 07-14-2006, 03:47 AM

Rugged, ......a low call back ratio dont mean squat......

even being an S corp does not mean you cannot

be sued out of business.... or literally BLED DRY..

An Umbrella insures you for another mil of

coverage and it also covers any LEGAL expences that might

arise from being sued.... your legal defence FOR FREE...

Without an Umbrella , if you get friviousley NAMED in a Lawsuit

you still have to defend yourself even if you are completely 100%

innocent... or you might have a judgement claim against you.....THATS VERY BAD.

That can cost you a lot of out of pocket money to have a Lawyer defend

you. and possibly put you out of business..

Do you know any honest Lawyers that will treat you right and not overcharge you
when you are at their mercy???

with the umbrella, your legal defence is all paid for.
--------------------------------------------------------------------

I mean this with all due resepct.....honestly

you should not got out the door today without it...

**Cass** · 07-14-2006, 04:05 AM

I am saying this from legal knowlage.

If you have or are incorporated and you think this protects you from personal liability in a legal action you need to talk to a lawyer who specificly deals with corporations.

Corporations can to a degree protect you only if specific things are done and followed your lawyer can explane it all to you.

Many people are deceived into thinking that by incorporating they are protected personally when most of the time they are not.

Insurance is the best protection.

Talk to a lawyer about it.

**master plumber mark** · 07-14-2006, 04:23 AM

a corporation is only as good as the paperwork it keeps....

the VEIL of the corp can be pierced ANYTIME BY ANY LAWYER

becasue their is NOT ENOUGH INSURANCE to cover the MASSIVE DAMAGES

and judgement from a lawsuit.............

they follow the money trail like hound dogs.......

then the President, Vice President and Secretery can all be

gone after for their assets...........

It all depends on YOUR ASSETS and the others in the S corp
if it is worth them going after.....

NEVER < EVER > EVER become a VP or secretary for

some "brother in law" wanting to set up some sort of "half assed corp"

it can get you into very hot water some day...

**coach606** · 07-14-2006, 06:38 AM

When we bought our house our lawyer advised us to both become "tenants in the entirety." She said it would protect us if either of use were individually named in a lawsuit because technically we would both own 100% of the house.

I'm sure this isn't 100% certainty, but it's some protection.

I also find that many teachers here in Chicago really believe that they can lose their houses over friviolous lawsuits over kids and their grades, etc. It's definitely a fear tactic applied by parents and sometimes administration. It's also total bs.

A lot of money is made playing on people's fears. This discussion is another example of it. It all depends on your experiences, but most of us aren't likely to be sued, ever. Consider the math involved. $700 for insurance with a possible payout of 2 million. Something like one out of every 10,000 people are sued in this calculation by the insurance company just for them to break even. So it's likely less. Or look at it this way 100 out of every million people are sued based on these calculations. I guess it could be you. I would lose my mind paying 60k because of tapping that school bus.

Insurance is a great thing for piece of mind. But I advise that you also keep some realistic numbers in your head. Not everyone is an unscrupulous, money hungry jerk.

One thing I've learned as a public school teacher in Chicago is that 99.9% of all kids are perfectly nice and decent people.

**master plumber mark** · 07-14-2006, 12:23 PM

well the world might be all peaches and cream,

but all it takes is one person trying to

" grab the brass ring through your wallet"

been there and done it,

even got the T shirt too.....
---------------------------------------------

It says somewehre to "Love all your brothers" ,

it dont say anything about trusting all of them....

By trusting everyone , you could suffer the consequences.....

of being that gullible....and learning this lesson the hard way.

**prashster** · 07-14-2006, 01:06 PM

Not all liability claims are sinister, Coach. Sometimes a good guy makes an honest mistake or hits an unforseen snag. In that case, insurance is (hat tipped to Martha Stewart) a good thing.

**coach606** · 07-14-2006, 01:38 PM

Good point.

**coach606** · 07-15-2006, 06:14 AM

I'm sorry about your accident. Sounds like a raw deal.

What you have to understand is that anyone can sue. State law in my part of the country says that you cannot sue a public school for negligence, only for willful conduct. So if I slip on some ice in the parking lot, I would have to prove someone put the ice there willfully, in order to hurt me. This is state law.

Do people sue? All the time. There are tons of state laws against suing public institutions and yet they are sued all the time. A lot of these suits are settled because the state doesn't want the risk of a big judgement. And it would be a risk.

Tennants in the entirety is real protection. It won't stop someone from trying to get your house. But legally no one suing you can take it because it's not yours! Could a court overturn this and give your house away? I suppose so. But it's darn unlikely.

Anyone can sue. That doesn't mean he/she will win.

**Dunbar Plumbing** · 07-15-2006, 06:05 PM

Dag Nabit!

Now you got me thinking and the idiots I have to drive around all the time wouldn't be a bad idea.

In the grand scheme of things it couldn't be that much more for the umbrella policy.

When I first got incorporated my lawyer told me that it's best to get anything of value into your name personally. I'd ask "Is that true?" but this is a plumbing forum, not a legal advice forum.

**Cass** · 07-15-2006, 06:56 PM

RUGGED, if it is in your name and the corporation doesn't shield you then all your assets are right there for them to grab. The right kind of Trust, as long as it is set up right, is what I think works best.

Having the Corp. is good for deductions, ect. but not for protection. For protection insurance and a Trust.

**master plumber mark** · 07-15-2006, 06:57 PM

---------------------------------------------------------

Heres a cute one for you.....

I put in a gang sink in a factory back in 1993

they had in- house maintaince people that repaired it from then on

I never touched the unit since 1993

In 2000 the guy that actually was going to repair it
slipped on the floor in the water leaking from that unit
and cracked his skull open...hurt himself pretty bad....

I got named in the lawsuit.....for not properly installing
this unit 1993 !!!!! LOL....

So I turned it over to the Lawer that was in retainership

with my insurance company , and eventually (after about 9 months)

it all was thrown out of court.....

but I never had to pay a lawyer one red cent in defence of my

FRIVILOUS lawsuit.....

The lawyer could have stuck me for 9 months worth of billing

and I would have been at his mercy for time and expences....

**coach606** · 07-15-2006, 09:01 PM

Peace of mind is what matters, I guess.

My opinion is not to get too hung up paying for insurance. If you've been paying $1400 a year for 15 or 20 years that adds up fast to 20 or 30k in insurance.

I'm sure the court took 9 months to meet, but I don't think that means your lawyer was billing you for nine straight months of hours. What leg work did he have to do on this one?

If you're happy with the insurance and your peace of mind, then it's the right decision for you.

I'll take the longshot risk of that frivolous lawsuit because believing that I will honestly need 30k worth of insurance payouts because everyone is looking to sue is even worse in my mind. This is a plumbing forum, not political, but I will say that a huge part of our economy is based on fear. Insurance definitely is.

The odds are way in your favor on this issue. Insurance companies know the figures. There making out great on all these payments because the odds are really slim that they'll have to make a big payout.

That's the real peace of mind.