ot:machine tool service people Liability Insurance

[deckeldoctor]

Hello Guys,

I am wandering any self employed machine tool service people,who do you use for your liability insurance companies.How are you classified?

I am shopping for a new carrier, I have never had to file a claim in 27 yrs of business and my liability insurance goes up 20-35% pr yr without any explanation as to why.

When I started yrs ago I had Prudential Basche.

I now have Homelite 1million per occurrence and 2 million per year. They only have me classified as electronic repair which means if I rebuild someones $30K spindle cartridge and it locks up I would have to eat it. So at the moment I in a sense have no mechanical coverage.

Insurance people really do not know how to qualify my business,mechanical repair, mechanical rebuilding,electrical/electronic repair, selling used and new equipment.

Some customers nowadays have crazy requirements 1 wants 5 million per occurrence and a 1 million umbrella on my car,over and above my current 100/300/100. I told them I would take uber or taxi from my hotel to get to their plant to get around that requirement or they could send someone to pick me up,lady on the other end was silent when I told her that.

Thanks guys I appreciate your input.

 

[ewlsey]

My carrier is Cincinnati. I've never had a claim in 5 year. My rates finally went down this year for the first time ever.

I have $1 million liability and $1 million umbrella. I do field service work but also run a machine shop and do some rigging. I also carry product liability insurance which would cover your hypothetical spindle.

I've not had anyone ask for more than $2 million, but I know it happens. If you want to set foot in anything nuclear for instance.

 

[ManualEd]

Don't know anything about the carriers, but see if you can talk to the person sending the insurance requirements, and explain what it is you actually do.

"Facility service" or "Repair technician" doesn't mean much to the guy pushing paper. He just wants to cover his ass with as much as possible, so there is a chance you can get more reasonable requirements out of them.

 

[moonlight machine]

Don't know anything about the carriers, but see if you can talk to the person sending the insurance requirements, and explain what it is you actually do.

"Facility service" or "Repair technician" doesn't mean much to the guy pushing paper. He just wants to cover his ass with as much as possible, so there is a chance you can get more reasonable requirements out of them.

I don't imagine there are a whole lot of Dekel repair people around, When they ask for something crazy just tell them to sod off. When they call back they will be more reasonable. That is what I did, they came back and were very nice the 2nd time around.

 

[deckeldoctor]

Thanks for the reply guys.

Brand of machinery has nothing to do with classification,as I service most brands, but specialize in European machinery because I like the precision and quality of the machinery.

I tell the insurance people I service machine shop equipment milling machines and lathes.

When I mention anything to do with a machine shop they are lost most never heard of a cnc/nc milling machine or a lathe.

Some say oh you service heavy equipment,I say no not bulldozers,backhoes,trenchers.

Then I try to explain more detail to Insurance people then they really have no idea. They really do not know how to qualify my business,mechanical repair, mechanical rebuilding,electrical/electronic repair, selling used and new equipment.

My current insurance is $1800.00 per year and it does not cover what I do.

How you are classified and your gross income affects your rates.

I try to explain that gross income is not a good way to compare there exposure for potential claims.

Example if I am selling more spare parts or more machinery that boost my income. IE not out actually doing service work were there is a chance for electrical/electronic burn up of boards or components or mechanical failures that increase their exposure and more chances of a claim by me.

I seem to be talking to people who insure cut and paste careers,landscapers,mechanics,hvac.

 

[guest]

I have my CGL policy through Federated- they specialize with machine shops so you won't get the "deer in the headlights" look when you explain what you do.

So far rates have been stable, the only audit has been to send them a schedule C for one year. No charge for Accord certs, just call my agent and give him the details of the additional insured, one copy for me and one for them.

 

[Joe Miranda]

I switched to Sentry years ago and am very happy. Rates are reasonable and no unexpected rate hikes. They are very familiar with machine shops as that is something that they specialize in.

 

[CatMan]

Have you tried telling your insurance company that you're a "contract factory maintenance technician" ? Which, is about a close as they're going to classify you. I figure there's enough contractors out there doing factory maintenance, that they should have somebody to group you with.

 

[deckeldoctor]

Thanks guys,

Now I least have a couple of companies I can shop since they have other persons in the same profession insured that I can approach.

In my attempted shopping for new carrier I have spent at least an hour per attempt and basically giving a lot of personal and company information to people who can't help me that maybe out on the net which is BS.

Thanks guys much appreciated!

 

[deckeldoctor]

Most of the companies that have ridiculous requirements are major Corps. They want me to have a million dollar insurance on my car just to drive onto their property and park and then service their machines Owned by Warren Buffet. Their machines are 35 year old CNC Deckel worth $15K each on used machinery market. They actually un hooked their machines and moved them to their shop supervisors steel building on his property for me to service then moved them back.
The most recent is another major company who will not make allowances for me to enter their property. The reason I started to shop for new carrier.They are also thinking of shipping me their machine at an est $3K round trip from NJ to SC for me to do basic annual maintenance.

 

[ewlsey]

That's fucking crazy. Every time I hear a story like that, I think about upping my rates.

I know a service guy who went to do a job on a Naval base. They would not let him on the facility with a rental car because it did not have a company logo on the side. He had to park in a public parking lot and walk several blocks carrying all of his tools and then drag them across the base.

Meanwhile the employees can park their $600 Geo Metros wherever they want with no proof of anything but employment.

 

[Chip Chester]

In your position, I would try to find a 'host shop' -- ideally someone who does work for the big company, and may be motivated to help out -- and have the machine delivered there, where you can have power, air, and coffee. Pay them a square foot rental charge, and since your work will be right in line with what they do, your insurance riders/etc. should fall in line with theirs. Granted, it adds another variable, but it's hopefully a friendly field. Beats shipping precision machinery cross-country after 'calibration'. Plus, you may pick up some service clients, if you want...

Also, if folks insist on basing rates on gross income, consider spinning off the parts side of the business to a newly-created LLC that just sells parts. Paperwork hassle, but your service income would be isolated from parts income. You'll have to evaluate if it's worth the time and trouble, though.

Don't know your vehicle setup, but a big job box/tool box that gets forked out of the back
of your van and brought from the front gate to right beside the machine you're working on could actually be more convenient than running back out to the truck five times a day. Then, no million dollar vehicle coverage for a $15,000 Ford Transit.

I would be tempted to itemize excess insurance coverage on the bill. Here's my original quote, and here's the extra money your administrative policy has added to the total.

It's always somethin', though...

Chip
And for the

 

[Chip Chester]

That's fucking crazy. Every time I hear a story like that, I think about upping my rates.

I know a service guy who went to do a job on a Naval base. They would not let him on the facility with a rental car because it did not have a company logo on the side. He had to park in a public parking lot and walk several blocks carrying all of his tools and then drag them across the base.

Meanwhile the employees can park their $600 Geo Metros wherever they want with no proof of anything but employment.

Time for a lunchtime visit to Speedy Signs for a $50 magnetic stick-on.

Chip

 

[ewlsey]

Time for a lunchtime visit to Speedy Signs for a $50 magnetic stick-on.

Chip

That's exactly what he did, but with tape and a sharpie.

 

[deckeldoctor]

I had to have magnetic signs made for my for my truck if I wanted my vehicle with spare parts and tools within walking distance in a secure plant so I did not have to exit secure check point and then re-enter.
Since I have been in business I have never damaged anyones equipment or gotten hurt while on the job,other than minor cuts that required a band aid to continue with my service.
I do some service work for army and navy installations and other defense contractors sometimes escorted blindfolded by 2 or more armed guards to a declassified area(temporary walls erected around a machine). One of these installations actually has dormitory inside property for contractors to stay to avoid having to clear security every day.Some places bar code every tool I carry in, and better have all tools when going threw exit security check point.
I have tried to stop going to some of these kinds of places,having to pay $6k every couple years to clear background checks, the pay is not worth the stress added by being in such a place let alone getting their machinery repaired.

 

[ewlsey]

I've been to some nuclear/defense facilities. No cell phones, no laptop, everyone has a pager. Armed escort at all times, even in the bathroom. Temporary walls around the machine. The escort yelling out "unsecure" at the top of his lungs as you walk into a room. Other than levels and some specialty stuff, I just left my tools in the truck. They gave me a helper with a set of tools and I mostly just instructed him on what to do.

Then there are the automotive plants. They are almost worse. They don't want anyone seeing anything. They search your car, but on the way out, not the way in. They want to make sure you didn't sneak out the latest XYZ bracket for some Ford that actually get assembled into a weldment at another facility and shipped to Mexico for final assembly. Getting permission to take a picture of some broken gizmo requires approval from Christ almighty.

 

[deckeldoctor]

When I go to those type places were I have no contact with outside world I always tell my wife where I am going and at least 1 other person,just incase I should disappear or be in some industrial accident?
I have been onsite when the armed guards tell me they dropped something heavy on the other side of a roll up door, I said bullshit I didn't feel it threw the floor and I was hit by shock wave of air around and under the door. There was no evacuation though.
There are some scary places in peoples back yards that they have no idea what goes on inside of some of these plants,that would leave a big crater in the ground.

 

[CarbideBob]

I have to ask,
Is a 1 million per occurrence policy worth buying today?
If you get hit with something you worked on doing serious hurt surely the award far exceeds this.
One can structure the company so that you just shut it down and restart with a new name or get much higher coverage than this....
In today's dollars I'd think you at least 10X too low, a dollar now is not a dollar from 27 years back. The lawyers you have to worry about do not go after small sums.
Us old guys tend to think of a million as big bucks but it is not with our current medical costs.
Bob

 

[deckeldoctor]

Bob
My liability is for the repair of the machine. I have been asked by customers to defeat door interlocks and other safety items which I will not do because then it does fall on me. If safety items have been defeated by my customers I do not have control over them,the company who owns the machine is at risk. I always make notes on my service reports as to what I observe and when I can have access to my camera phone I have been documenting many things that way.

My amount of liability insurance is to protect me if I burn down a customers machine or cause mechanical damage in some way for my repairs to the machine. It also covers me while I am on a customers property if I was to get hurt.

I can not fix stupid people from doing stupid things,no one can.

When I do a control retrofit My PLC has the same interlocks as the original control and operates the same as original as much as I can make it and where I can I make improvements.

If I design a machine or robot cell it has its own liability insurance up to the point my customer signs and takes acceptance and delivery, they usually have a contractual number of cycles with out faults or failures before they sign off the machine or cell then it is their responsibility. I design numerous safety items and interlocks that customers pay for when I design their machines.