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OfflineHumility
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Surety Bond and Insurance; same thing?
    #14505651 - 05/24/11 05:24 PM (12 years, 8 months ago)

Soooooo my state requires that to be licensed I obtain a surety bond for at least 25k which from what I understand is pretty cheap yearly (a little over a hundred dollars).

I've also read posts on the forum here which detail that a 1-3 million (1 seems to be the more popular number) insurance policy is usually required from farmers markets and grocery stores and such and that these policies cost 500 bucks or so.



Do these policies overlap?  Is a surety bond the same thing as insurance or are these different concepts?  Could I simply pay 500ish bucks a year or would I wind up paying insurance and surety bond cost?

Thanks in advance for the help folks; it's getting really close here :smile:.  Putting the finishing touches on my room (including an AC unit; FINALLY i can control the temperatures) and I'm hoping for success.


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OfflineRogerRabbitM
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Re: Surety Bond and Insurance; same thing? [Re: Humility]
    #14505799 - 05/24/11 05:57 PM (12 years, 8 months ago)

If I could get a million dollar liability policy for $500, I'd have one.  I called every agent in a three county area around me and the lowest price I got was $8K, because they'd only write the liability policy if I bought all my other policies through them.  I found one that will only cover farmers markets for $300/year, but not sales to grocery stores.

I simply boycott any store that pulls that BS.  I've got one of only two certified organic shiitake farms in the state of Washington, so they lose out to other stores that want my product with no strings attached.  After all, we can only grow so much.

The surety bond is something else.  Are you sure you need a license?
RR


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InvisibleHipsterDoofus
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Re: Surety Bond and Insurance; same thing? [Re: Humility]
    #14505844 - 05/24/11 06:06 PM (12 years, 8 months ago)

A surety bond is not the same as insurance.


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OfflineHumility
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Re: Surety Bond and Insurance; same thing? [Re: HipsterDoofus]
    #14507948 - 05/25/11 12:54 AM (12 years, 8 months ago)

Well I'm pretty sure i need a license.  The way the law is worded is that any producer or seller of produce at all has to be licensed, it shouldn't cost much at all per year.  I'd love to sell without a license but I'm really nervous about growing hundreds of pounds of oysters and not being able to sell to anyone because I'm not licensed, that'd be a lot of wasted time and effort.  I'm no fan of the state, and if I could get around funding their efforts I'd certainly do so.

I'll try to do what you're doing with the insurance and just hit up plenty of markets.  Oysters around here are at $16/5 lb box so I figure I should be able to sell 2-5 boxes at a time and just make my rounds to every market I can.

I don't think restaurants or retail sales at farmers markets will meet the kind of returns I'll be looking for to make this a worthwhile venture.


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Invisibleife
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Re: Surety Bond and Insurance; same thing? [Re: Humility]
    #14508771 - 05/25/11 08:06 AM (12 years, 8 months ago)

RR so if someone gets sick you could be in trouble? Or is there some sort of protection to be had?


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OfflineRogerRabbitM
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Re: Surety Bond and Insurance; same thing? [Re: ife]
    #14508873 - 05/25/11 08:48 AM (12 years, 8 months ago)

Who is going to get sick on organic shiitake grown on sterilized sawdust? :shrug:
RR


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Invisibleife
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14508922 - 05/25/11 09:07 AM (12 years, 8 months ago)

Quote:

RogerRabbit said:
Who is going to get sick on organic shiitake grown on sterilized sawdust? :shrug:
RR





hehe.. I was hoping you'd say that...


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Offlinedebianlinux
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14515851 - 05/26/11 03:03 PM (12 years, 8 months ago)

Quote:

RogerRabbit said:
Who is going to get sick on organic shiitake grown on sterilized sawdust? :shrug:
RR



A lady named Mrs. Sue Happy... the reason insurance exists to begin with.

That said, I've never been required to provide proof of insurance to sell to restaurants, grocery stores or farmer's markets in TN or NC. Maybe there was a volume threshold?


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OfflineRogerRabbitM
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Re: Surety Bond and Insurance; same thing? [Re: debianlinux]
    #14516009 - 05/26/11 03:39 PM (12 years, 8 months ago)

Mrs Sue Happy can kiss my ass and pay all my legal bills if she sues me.  There's no way a certified lab would testify that I shipped rotten/tainted product, so there's no way I'm giving my money to greedy insurance companies.  Christ, I already give half of it to the oil companies for propane and delivery costs, I'm sure as hell not going to give the other half to insurance companies which would just deny the claim if I ever needed it anyway. It's how they make their money.
RR


--------------------
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semper in excretia sumus solim profundum variat

"I've never had a failed experiment.  I've only discovered 10,000 methods which do not work."
Thomas Edison


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OfflineHumility
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14516085 - 05/26/11 03:52 PM (12 years, 8 months ago)

Quote:

RogerRabbit said:
Mrs Sue Happy can kiss my ass and pay all my legal bills if she sues me.  There's no way a certified lab would testify that I shipped rotten/tainted product, so there's no way I'm giving my money to greedy insurance companies.  Christ, I already give half of it to the oil companies for propane and delivery costs, I'm sure as hell not going to give the other half to insurance companies which would just deny the claim if I ever needed it anyway. It's how they make their money.
RR





He does make a damn fine point...


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Invisiblejohnm214
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14517492 - 05/26/11 08:20 PM (12 years, 8 months ago)

Quote:

RogerRabbit said:


I simply boycott any store that pulls that BS.





Do you recall what specifically they require to be covered by the bond/insurance?  i.e. is the bond only for liability that you might incur to the store through whatever means, i.e. failure to deliver product, breach of contract, liaility to the store for your negligence; or do they also require than the bond and insurance cover claims the consumer makes against yourself directly, rather than against the store?  I could see the first one, but not the second.

The stinky thing is that if they require you to have those bonds and policies, the insurance companies often divest you of any authority to settle matters on your own, and even if the plaintiff is just a scammer, liar, or jackass who did something he shouldn't have, they reserve the right to settle even against your wishes.  This of course, then, is an insurance payment that is on your/your buisness's record and potentially able to increase your rates.  I know a doctor who had this issue with some idiot before, he was willing to take such a little sum to settle the case, the insurance company refused to continue the defense, and of course then this information is disclosed every time he gets a new quote for insurance.


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OfflineRogerRabbitM
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Re: Surety Bond and Insurance; same thing? [Re: johnm214]
    #14517690 - 05/26/11 08:58 PM (12 years, 8 months ago)

They never get around to explaining what they want covered, because they know the insurance is not obtainable by mom-and-pop family farms anyway. They only require it to justify importing Chinese and Mexican produce over buying American, even when our prices are substantially lower and quality is higher.

There is a supermarket in the next county over that has horrible quality chinese shiitake for $4.99 per 3.5 oz package.  Meanwhile, their cost for my certified organic, high quality, locally grown shiitake would only be $6/pound, but they refuse to stock it. The manager confided in me that the home office has a policy against buying from local family farms.

For example, this is Washington State, the apple growing capital of the world, but this store stocks only Chinese apples. For the record, I'll never sell to them in the future, even if they change their evil ways.  I tend to hold a grudge for a very long time.  Besides, with the stores that do want my product, I'm sold out for the foreseeable future anyway.
RR


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semper in excretia sumus solim profundum variat

"I've never had a failed experiment.  I've only discovered 10,000 methods which do not work."
Thomas Edison


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OfflineHumility
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14518390 - 05/26/11 11:00 PM (12 years, 8 months ago)

RR could you to some extent confide in me (or the whole shroomery lol) by sharing some idea of what your sales look like?


How much are you selling per client and how many times do you restock that client on a monthly basis?  Also, what sorts of places are you selling to, restaurants, grocery stores (large), grocery stores (small, like asian grocers) or farmers markets?

I'm mostly interested in oysters, but shiitake numbers would be fine as well.

That would help give me an idea of how many and what kind of places I should target when I begin my venture (plan to hit the market around mid-late june).

Thanks a lot in advance.


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OfflineRogerRabbitM
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Re: Surety Bond and Insurance; same thing? [Re: Humility]
    #14518598 - 05/26/11 11:39 PM (12 years, 8 months ago)

I'm horribly allergic to oyster spores and can't grow them any more except for outdoors.  I haven't even started my spawn yet for this year.  I only grow shiitake at the moment.

There's no restaurants in this area because it's too remote.  I sell to grocery stores and I have a guy that takes them to the farmers markets for me. I originally set up the booth spaces with management, and then hired him do the work. I pay him $3/lb to sell them, so the mrs and I can stay here and run the farm, which lets us all make money.  Besides, we're pretty much hermits, only going to town once or twice a month.  I still have gas in my pickup from last fall.  I'm in an extremely rural area, so my markets are fewer and farther between than they are in a large city.  In fact, in the 100 square miles around our farm, there's only 9 people living up here, including the mrs and myself.

I use USPS priority flat rate boxes for delivery, since the mailman comes up our canyon road every day.  I can load 8 pounds into each large flat rate box, and at $14.50, it's much cheaper than a delivery truck.  Ever since fuel got so expensive, grocery stores have become used to getting shipments from UPS, FedEx, and USPS daily, and they beat selling for half price to a wholesaler.

I'll have to keep exact sales and income figures confidential, but suffice it to say we're selling out while producing about 5 to 7 pounds of product per month per square foot of fruiting area on first flush, and then the blocks are moved outdoors to semi shade under the Alder trees along our creek, to fruit again and again all summer.  We're also starting to get blocks from last year that sat under the snow all winter fruiting again.  We got the whole area around the mushroom house and along the creek banks certified organic, so we can sell those mushrooms the same as the ones grown indoors.
RR


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semper in excretia sumus solim profundum variat

"I've never had a failed experiment.  I've only discovered 10,000 methods which do not work."
Thomas Edison


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OfflineHumility
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Re: Surety Bond and Insurance; same thing? [Re: RogerRabbit]
    #14518626 - 05/26/11 11:43 PM (12 years, 8 months ago)

Thanks a bunch man.


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