[cadguy247]

I'm ordering a PCNC 1100 on Tuesday and I got a small business loan to purchase it, which will require me to insure the machine. Has anyone got insurance for theirs? If so, what type of insurance is needed and do you have any contacts for Insurance companies that will insure these? Also, if it's not imposing, what should I expect to pay for the insurance?

Thanks
Kyle

[Steve Seebold]

My machine is in my garage and is covered by my home owners insurance.

[cadguy247]

mine will be in my garage as well but will be used for business and since it's a small business loan I will have to carry a separate policy. plus my home owners insurance already tried to drop me for 2 clams over a 12 year period, so I'm not even talking with them about it.

[SCzEngrgGroup]

I would expect any insurance agent should be able to provide what you need, and cost should be minimal.... If you're using it for business, I'd bet a homeowners policy would NOT cover it, without being explicitly called out in the policy.

Regards,
Ray L.

[cadguy247]

I would expect any insurance agent should be able to provide what you need, and cost should be minimal.... If you're using it for business, I'd bet a homeowners policy would NOT cover it, without being explicitly called out in the policy.

Regards,
Ray L.

I would expect so, but the 2 local agents I spoke to had no clue what I was talking about. I see that there are CNC specialty agents that provide boiler insurance but I have no clue what type of insurance is even needed and all the bank told me was that I need to insure it. Tormach didn't even have a idea of anyone I could call.

[mountaindew]

A small business would rent space from a commercial landlord "this might even be you" your tools and equipment for said business would be covered under a rider on your general liability insurance or a renters policy that convers only contents and not building. I would guess there are a few other creative ways to insure your tool to satisfy banking or personal requirements. I always like to note "rant" where I live there is a use tax of 7.5% for all business equipment, tools , whatever and would need to write a check for 1200$ each year or until a method of deprecation lowers the value.
More info to consider in your business plan because many "city" municipal tax structures are similar. btw I would guess it would add at most 50-100$ a year to your g.l. insurance for most all your tools in a small shop.
Ouch want a kicker look at product liability insurance now there is a case by case and cost by cost basis.
md


Reading above post after this post
And I was thinking I was only person where people looked at me like I had 2 heads or something.

[SCzEngrgGroup]

I would ask for commercial property insurance. The bank wants to make sure they get their money back if the machine is stolen, or the building burns down, etc. So, you just need the business equivalent of a homeowners policy. Any agent that handles small business insurance should be able to do it easily. Just make sure it covers loss/damage of capital equipment. Hartford, Nationwide, and most large insurance companies should offer this.

Regards,
Ray L.

[Steve Seebold]

I use mine for my hobby in my garage and I sell some stuff along the way as well. I have a business name (Mid Day Machining) so I can have a resale number for buying material, however, I will usually just pay the sales tax and not worry about it at tax time.

When I had my real CNC shop I was insured though The Hartford. They had the best rates at the time and the agent knew what he was talking about. You could also check with Farmers. I know they write business insurance. There are lots of companies out there who write insurance for small machine shops.

Don't get sucked into product liability insurance. I had an insurance agent tell me once, "sure, I'd love to sell you $1,000,000.00 worth of product liability insurance, but if you make parts for a Boeing 747 and someone proves that your part is what caused the plane to crash, they'll take your million dollars worth of insurance and come after you for the remaining $224,000,000.00", Bankruptcy is bankruptcy whether it's for ten dollars or $225,000,000.00.

[mountaindew]

Want an advantage over your competition and a leg up in your business.
Plan ahead and have a wife that is a cpa, a father that is a lawyer, a mother in banking. Then add a mother in law that is a top selling insurance agent. All that's left is a sister in realty and most your bases are covered for business services anyway .
md

[RussMachine]

Your Homeowner's Insurance 'personal property' coverage is enough to cover the loss of your Mill.
Show the bank a copy of your policy.
That's exactly what I did when I got my small business loan for my TORMACH.

[cadguy247]

I am not worried about liability, what I do usually involves many outsourced companies and the only one that is liable is the company that brings all these resources together. That being said I think what Ray L says makes the most sense. I am almost positive that my home owners insurance wont cover everything in my garage if it burns down since I have close to 100k worth In it and I only have 25k worth of coverage

[pickled]

FYI- I had a company write me a commercial policy for a residential operation before. At the time I had $300k in replacement value assigned to my assets on the property, an acts of terrorism rider, general liability (i.e. slips and falls by UPS etc.), and $50k in medical coverage per incident. It ran $2800/year and was through a company identified via an insurance broker. I find that insurance brokers are your best bet for getting one off operations covered...I swear that they don't sleep until they give you 50 options! Anyhow I had a machine here in my basement before I moved it into my shop and my homeowners guys were NOT happy! They basically told me that they would cover $1500 replacement for the 770 IF it was not used for business. If a business use was proven on the property they basically stated that my entire policy would be voided if this asset had any contribution to a claim. I called my broker and told him to tell them to pound sand and he found me another company that wrote up a policy to cover me for the 2 months it took to get my other property set up. Sometimes the risk reward scenario with insurance is absolutely not in your favor.

[LeeWay]

I just went through this stuff last year. I leased my machine through a company that does this often. I was given the option to get my own insurance or go with the company that the Leasers always suggest. I did that. The cost is not outrageous. Maybe $25.00 a month.
The mill burned up last year. Something in the control panel started it, but since everything inside was toast and a big pile of melted aluminum and wiring in the bottom of the cabinet, I'm not sure they pinpointed the source.
A Forensic engineer did investigate.
The Local FD did as well. My Homeowner's insurance came out too.

Now my leasing insurance deductible was $1000.00. That is what it cost me on a new replacement mill. They paid the rest.

My homeowner's insurance only paid me for personal property inside the building that was lost. No business stuff at all. They covered the cost of clean up too. So, I recovered the $1000.00 deductible.
I keep planning on getting down to the Homeowners insurance and talk to them about small business insurance. The longer I procrastinate, the more impending doom I feel.

All in all, I am very fortunate that we got it under control right about the time the FD arrived. Actually all the innards were just burned out by then. Black smoke was rolling though.

[tmarks11]

Based on the unused fire extinguisher on the wall behind the machine, I am guessing the fire happened when the machine was running unattended?

Yikes... that looks worse than I thought... you said the machine had caught fire, but the smoke damage in your shop is impressive!

[LeeWay]

It happened first thing in the morning. The machine had just been powered up. Not running. My Son had cranked it up. He then steeped outside where you see the smoke. We were in the process of installing an end cap and garage door on the building. A few minutes later, he smelled smoke, looked and saw immediately where it was coming from. Killed the breaker to the mill and grabbed the fire extinguisher on the door. Shot it off and hollered at me. We then took turns shooting the extinguisher and water hose AT it after I killed the main breaker. You could not see anything at all.
I had always intended to put sheet rock on the ceiling too over the OSB, but I wanted to be able to use a normal screw anywhere. Now it is getting the sheetrock. We washed down all the walls and cabinetry and repainted everything there with Kilz. Sheet rock itself is covering up the ceiling smoke damage.

I also placed the new mill in the center of the room with the left end of the machine against the wall. Back is now fully accessible and the machine itself is farther from the ceiling. Live and learn.

[tmarks11]

wow. Just goes to show how little time it takes for a fire to get ugly. First 2 minutes are critical, sounds like your son had all the right moves.

I am guessing there is no "lights out" machining planned in your future?

[LeeWay]

Another shot.

No lights out machining. It doesn't run without someone in the shop now. I mean IN the shop.

[R.DesJardin]

Holy moly that sucks. I see that the machine isn't a Tormach, what brand would it be? I have been through an electrical fire from a vacumn that destroyed my house, I feel for you..

Another shot.

No lights out machining. It doesn't run without someone in the shop now. I mean IN the shop.

[LeeWay]

That was an older model Novakon Torus. I replaced it with the newer version of the same thing. Quite a few updated parts on it compared to the older one. It is a Novakon Pulsar stepper version.
I am just thankful no one got hurt and the damage was not any worse. My little home made mill really came in handy to keep us producing while I waited on insurance companies and it's replacement.

[cadguy247]

insurance has to be the most screwed up, corrupt in industry there is. So far quotes range from $500 a year to $2500 for the same coverage, the Hartford being the cheapest, however they won't call back or email until you hound them 5-6 times each time so I still don't have a policy yet....