Preparing for unknowns (accident insurance)

How are you protected in case of accident?

  • Workers compensation

    Votes: 1 8.3%

  • Supplemental Insurance

    Votes: 1 8.3%

  • Accident insurance

    Votes: 3 25.0%

  • Savings

    Votes: 2 16.7%

  • Rich parents

    Votes: 1 8.3%

  • GoFundMe

    Votes: 0 0.0%

  • Life insurance

    Votes: 2 16.7%

  • No plan

    Votes: 2 16.7%
  • Total voters
    12
RyanCafferky

RyanCafferky

Been here a while
Location
Hood River, Oregon
Here is the backstory:

I’ve been in the tree business for 23 years. Currently I do a few different things for work. Some of my work is as a contract climber where I prefer to focus on challenging removals. Some of my work is as a consultant doing different types of safety oversight in California. Then when I’m home I do all types of work on the farm where I live such as logging, running a sawmill, and everything that comes with keeping an off grid homestead up and running.

My dilemma is this: how should I best prepare financially for the possibility of getting hurt or injured in this dangerous industry? As awesome as you guys are, I don’t think that GoFundMe is going to keep me afloat for months or years if I mangle myself while doing a messed up removal or inadvertently get injured at home on the farm. One option that I have is to start paying myself as an employee and getting workers compensation on myself. My other options are: supplemental insurance, accident insurance, life insurance, or just putting more into savings. What other things should I consider?

I would love to hear what other self employed business owners do to protect themselves and their family from unplanned events. Also I would love to hear from those of you who may have been burned by insurance companies or models of protection that all of us should avoid.
 
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You need more than 1.

*Do you have employees? Need workers comp. Are you employed (not contracting) by somebody else? They need workers comp for you - if they don't, I wouldn't work for them.

*Accident insurance: Does that mean just general liability? If you are self employed and contract climbing, absolutely.

*Savings: The general recommendation is to have 3-6 months of expenses squirreled away so if something happens, you can live without selling your house, etc...

*Life insurance: is anybody depending on your income? Then you should have at least your annual income x 3 or 4. Some suggest 8-10 times annual income of term insurance - that seems excessive, but you need to see what those depending on your income think. Also, if they can sell your business/equipment to make up some of that, you could reduce the amount of life insurance you have.

*Supplemental insurance: I don't have any. An umbrella policy isn't a bad idea. It covers things other insurances don't. There is also supplemental heath insurance (Aflac, for example). Look at your health insurance policy and savings account to decide if you need that.

Not on your list:
*Health insurance. Does your health insurance policy cover you if you are injured on the job site when you own the business? If not, then look at workers comp again and pay on yourself. See what the policy says about how much that will cost.

*Automotive - assuming that since it is the law in all (?) states.

*Disability insurance: kicks in if you are unable to do your job due to a disability. I don't have this, but think I probably should...

*Professional liability (also called errors and omissions): if you make professional recommendations that are wrong, call a tree low risk and it fails the next day, cut a neighbor's tree, etc...
 
ATH said:
You need more than 1.

*Do you have employees? Need workers comp. Are you employed (not contracting) by somebody else? They need workers comp for you - if they don't, I wouldn't work for them.

*Accident insurance: Does that mean just general liability? If you are self employed and contract climbing, absolutely.

*Savings: The general recommendation is to have 3-6 months of expenses squirreled away so if something happens, you can live without selling your house, etc...

*Life insurance: is anybody depending on your income? Then you should have at least your annual income x 3 or 4. Some suggest 8-10 times annual income of term insurance - that seems excessive, but you need to see what those depending on your income think. Also, if they can sell your business/equipment to make up some of that, you could reduce the amount of life insurance you have.

*Supplemental insurance: I don't have any. An umbrella policy isn't a bad idea. It covers things other insurances don't. There is also supplemental heath insurance (Aflac, for example). Look at your health insurance policy and savings account to decide if you need that.

Not on your list:
*Health insurance. Does your health insurance policy cover you if you are injured on the job site when you own the business? If not, then look at workers comp again and pay on yourself. See what the policy says about how much that will cost.

*Automotive - assuming that since it is the law in all (?) states.

*Disability insurance: kicks in if you are unable to do your job due to a disability. I don't have this, but think I probably should...

*Professional liability (also called errors and omissions): if you make professional recommendations that are wrong, call a tree low risk and it fails the next day, cut a neighbor's tree, etc...
Click to expand...

Thanks for the thoughtful response. I do not have employees. If I employee people I run them through a temp agency so they are covered by workers comp. In Oregon, as a contract climber the state views me as a subcontractor and not an employee so I am not covered by the workers compensation of the contractors I work for. I have general liability for my business, automotive insurance, health insurance, and a supplemental policy for medical stuff that the regular policy doesn’t cover. But if I were seriously hurt while working as a contractor then how I am currently situated, I will not be doing very well for long. Since I am just a contract climber, my business is essentially worthless to anyone but me because I am the main company asset.
 
So I have several life policies. I learned the value of having those when my wife and son died. I actually have 3 policies on myself and one on my son. I have healthcare through my new spouse. I lost all my fail safe benefits when I retired from the FD. I have been exploring disability insurance as WC is not for the company owner, only for employees. Disability insurance is tough to come by in our line of work. I've been trying to get it for a year. So my plans are life, strong savings account and a pretty healthy chunk of change in the market. I also have equity on my house and my rig. My best advice to to start with some kind of life policy and savings plan. Stay away from AFLAC on those policies. What you're paying for won't even cover a months of bills when you do the math. There has to be a plan. Trust me, when my life went sideways the insurance saved me from loosing my house and a bunch of other things. That insurance is also funding college for my son all the way through grad school. She had several policies. So my advise is search for disability insurance and understand you're probably going to get the door slammed in your face when you tell them what you do. Also check with an accountant because there are medical savings plans that come out prefaced you may be able to pay into. The market has been good to me over the last 8 years. I make enough interest to pay a pretty high private school tuition for my son and a little stop gap to myself every month. Of course it fluctuates but over the 8 years my return has been really strong. Anyway, whatever you choose, good for you to be thinking about it. Most people don't until they have a humbling experience that wakes them up to whats gonna happen if they get hurt. It also doesn't hurt that I get a retirement check every month for the rest of my life.
 
I was told the Key man policy wouldn't work for me because I am the employer. Key man coverage is for the employees in the event of the employer/owners demise or disability.
 
Maybe....

If you had a silent partner who put up all the money for your crane truck etc and he was to get half the profits he might require that your partnership buy key man insurance on you because if you died the next day and he had neither the skill nor desire to run the crane he would suffer a financial loss. That's a more realistic use of key man insurance in my opinion.
 
Oh I agree. I was just commenting that the OP would not benefit from key man as he's a one man show. The disability insurance is so difficult to get. They wouldn't even entertain the idea if I was 100% a climber.
 
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Do you have a financial plan/planner for the future? My wife and I began before we were even married to supplement our retirement and investment packages available from our employers.
 
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First time posting. Just found this website last night searching for mini skid steers. Just out looking. I sell insurance and mostly supplemental benefits. I have a firewood business separately that I’ve been doing for around 13 years. Hope to transition to a form of that in the next few years full time.

Few things I’ll be able to help you out with and give you a better understanding on the life and supplemental benefits side. Just remember I’m in New York it’s a state by state license and we’re usually the worst as far as laws.
Two types basically of life insurance. Depends on age, budget, and needed coverage.
Term is the cheapest. It’s straight life insurance (similar to car insurance as if you don’t get into an accident you get nothing just keep paying). You will get the greatest amount of coverage for the cheapest dollars. It is meant to cover a period of time such as 10, 20, or 30 years. When your coverage period ends you either have to convert it to a whole life policy, get a new term policy again, or just go without coverage. In New York regardless term coverage ends at age 80 where most other states it is 90. The one good thing is if you can only afford this currently it will keep your health status (you usually don’t get better health as you age) and you can convert it to a whole life policy. You may pay on this for years or the whole term and beneficiaries will get nothing out of it.
Whole life is More expensive than term. There will be a payoff though. You just don’t know when. It’s payable til age 100 unless you take a limited pay policy which means it is paid off earlier such as 10, 20, or age 65. You also have a separate cash value account as your premiums are paid you have that as well. You can take a loan from that as long as it doesn’t generally deplete 90% of the cash value from the account. You don’t have to pay it back but it is a 5% interest rate from the company I have it through anyways. It’s a pre-payment of your death benefit if you pass and it isn’t paid back. Just reduced the death benefit. You also get dividends on a whole life policy. That will grow over time with interest and add to the policies death benefit. Life insurance will not get cheaper as you age and health differences change.

On the different types of supplemental benefits I’ll go in detail for you. There’s 4 companies that do them with Aflac being the biggest then combined, Allstate, and colonial life. Colonial and Allstate sell only through business which you most likely wouldn’t qualify for as you need 3 employees and 1 policy for colonial, and two policies with different last names at Allstate to sign up for. Aflac and combined can do individual sales.

For a disability policy you have about a 1 in 4 chance of having a disability of greater than 6 months in your working years. One possibility you had not mentioned or anybody else had mentioned is a business overhead disability policy. It will not cover your personal wages but it covers the expenses of the business if you happen to go out on disability. Such as truck payments, insurance, etc

Accident insurance will pay you for broken bones, bee stings, concussions and a whole slew of other things. There just had to be a qualifying event that set it off. It will pay for each injury on top of each other in a lump sum. There’s basically diagnosis codes when you go to doctor, urgent care, or the emergency room. They pay a set dollar amount in the policy for each one. This goes directly to you to spend as you wish. Where as the health insurance is meant to pay the doctors, the supplemental is meant to pay you. It generally is used to pay co pays, deductibles, and time off work.

Any more questions or things I didn’t cover let me know. Hope this helps.
 
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Disability / Accident insurance in Canada (Ontario) is not hard to get or prohibitively expensive. And when I periodically do dumb things it is nice to have.
This little nick last fall netted me slightly over $900 Canadian ($300 US, lol).



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That makes more sense to 'separately' have a firewood biz...couldn't quite figure that out, although versed in deciphering texts messages.

I appreciate the info, too, and have been looking at these things. Having payments due would really be a place where the Biz Expenses insurance would be a savior. I'm hesitant to finance a $50-60K bucket-truck and a much bigger insurance premium, being that I don't have other earners for the company if I'm not out working, supervising, and doing the technical parts.
 
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