workmans compansation insurance

[howardrichman]

I've been licenced and worked in this industry for 30 years, I usually work alone and charge a fair rate to residential customers. At times I'll get some decent work from the local General building contractors. It seems recently in the last couple of years, I'm getting requested more than ever for a certificate of insurance w/ workers comp included w/ my liability insurance. The coverage is based on a minimum of $32K, and will cost me approx. $2000 yearly additional. Two of these contractors are threatening to drop me w/o it. They tell me they'll have pleanty of work for me to cover it, thats a gamble on my end; but; if so,as i see it my rates for them will have to increase or add an amount to the contract bill, after I divide the few builders I'de work for, which they'll see and be objective esp. getting the smaller 1 or 2 day jobs . I'm sure your all going through this if you operate a medium/large business with employees, but what does the sole electrician do? The rate is something like $5.5 per hundred of labor, which is easy to calculate before bidding or giving a bill, and just have them deduct that amount. The builders make it sound like a chore for them or their insurance auditor to calculate. They'll usually keep pushing for it, or just send the last payement w/ a big chunk deducted out, or the threat of holding the last check indefenetly till i get the insurance. Not Easy!

any help appreciated...
HR...

 

[petersonra]

How bad do you want their business?

Either eat the added cost or charge them extra.

I have found that virtually all promises of future work usually end up not happening when they want something out of you and the only thing they can give you in return is a promise.

 

[shepelec]

They want the insurance to help keep you from sueing them if you get hurt on the job. Look at it this way, if you fall off your ladder and break your leg, comp will pay you. Sure its a pain when work is slow and that bill comes in but if you ever needed it you'll be glad you have it.

 

[kwired]

I've been licenced and worked in this industry for 30 years, I usually work alone and charge a fair rate to residential customers. At times I'll get some decent work from the local General building contractors. It seems recently in the last couple of years, I'm getting requested more than ever for a certificate of insurance w/ workers comp included w/ my liability insurance. The coverage is based on a minimum of $32K, and will cost me approx. $2000 yearly additional. Two of these contractors are threatening to drop me w/o it. They tell me they'll have pleanty of work for me to cover it, thats a gamble on my end; but; if so,as i see it my rates for them will have to increase or add an amount to the contract bill, after I divide the few builders I'de work for, which they'll see and be objective esp. getting the smaller 1 or 2 day jobs . I'm sure your all going through this if you operate a medium/large business with employees, but what does the sole electrician do? The rate is something like $5.5 per hundred of labor, which is easy to calculate before bidding or giving a bill, and just have them deduct that amount. The builders make it sound like a chore for them or their insurance auditor to calculate. They'll usually keep pushing for it, or just send the last payement w/ a big chunk deducted out, or the threat of holding the last check indefenetly till i get the insurance. Not Easy!

any help appreciated...
HR...

That is exactly what it is. If the subcontractor holds the insurance then they have easier time managing it, but also need to realize that it will add to overhead for the subs, and they will expect more for their services, but most truly only care about themselves so that thought doesn't go very far.

They want the insurance to help keep you from sueing them if you get hurt on the job. Look at it this way, if you fall off your ladder and break your leg, comp will pay you. Sure its a pain when work is slow and that bill comes in but if you ever needed it you'll be glad you have it.

Laws may vary from State to State. I think in most places you do not have to have comp. on yourself if self employed, you do for any employees though. In the case of contractors, it gets complicated, if a sub has employees often there is option of the general holding insurance or the sub holding insurance. The general needs documentation from the sub though otherwise he can be liable for the sub's employee if something should happen on his project.

 

[petersonra]

most self employed people are usually better served by a disability policy than W/C because it covers more things and and is usually less expensive.

 

[hillbilly1]

It can also be a liability for the homeowner, if you get hurt and do not have it, the homeowner can be held liable for it.

 

[kwired]

most self employed people are usually better served by a disability policy than W/C because it covers more things and and is usually less expensive.

Disability for construction related trades is not cheap. Disability covers you whether working or not though, where W/C will want evidence that you actually were working if you have a claim. Not always as easy to prove with a self employed person especially if oneself is not on a payroll.

As far as I am concerned, I am working pretty much all the time but workers comp will not see it my way.

WC will not cover illness, or other conditions that come up that are not related to employment either. Say you have a heart attack, stroke, cancer, - even if at work, it likely was not because of work related hazards, but disability should still cover you for those types of things. It will not cover medical expenses but should cover loss of income because you can't work.

 

[ptonsparky]

Bite the bullet and pay for it. Sometimes you just have to, to keep doing the jobs you like.

Never hurts to have your independent insurance agent shop around for coverage in general. Mine was going to take a 30% hike this year to well over :jawdrop:.

 

[howardrichman]

Thanks for replies; Well; I called the insurance agent and have to wait for a call from a specific agent that just handles it. The GC's seem to think it'll raise there job prices slightly, but they'll be in for a surprise, if they cant keep THEIR word.

HR...

 

[infinity]

In New Jersey if you're business is a corporation you must have workman's compensation insurance even if you're the only employee. Here's a little outline of the regulations:

Who Must Insure?

The following employing entities must have workers' compensation insurance in effect:

Corporations ? All corporations operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, including corporate officers, perform services for the corporation for prior, current or anticipated financial consideration *.

Partnerships/LLC's ? All partnerships and limited liability companies (LLC's) operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, excluding partners or members of the LLC, perform services for the partnership or LLC, for prior, current or anticipated financial consideration*.

Sole Proprietorship ? All sole proprietorships operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, excluding the principal owner, performs services for the business for prior, current or anticipated financial consideration*.

​

http://lwd.dol.state.nj.us/labor/wc/employer/require/insure_index.html

 

[kwired]

Thanks for replies; Well; I called the insurance agent and have to wait for a call from a specific agent that just handles it. The GC's seem to think it'll raise there job prices slightly, but they'll be in for a surprise, if they cant keep THEIR word.

HR...

It will raise the GC's price either way. He either pays it himself and raises his overhead and passes it on to the customer or makes his subs provide their own - and they raise their overhead and pass it on to GC.

 

[howardrichman]

Thanks for replies; Well; I called the insurance agent and have to wait for a call from a specific agent that just handles it. The GC's seem to think it'll raise there job prices slightly, but they'll be in for a surprise, if they cant keep THEIR word.

HR...

Thanks; I'm not a corporation, but I know what you mean. I'ts not a law for me to have this insurance, but most GC's insurance policy providers requirement; that all subs (principle owner included) to be covered; period; probably to reduce the GC's premium.

HR...

 

[johnspark]

I went through this same issue and bought the coverage. You'll have to deny the coverage on a waiver, if you are not going to apply it to yourself. If you don't your first premium due invoice will be a lot more than 2K. You probably know this, but just make sure they have the paperwork so you don't do the "angry" dance I did when i saw my invoice. LOL.

 

[howardrichman]

The policy is required to cover myself as a self employed contractor

HR...

 

[infinity]

Bottom line is that in today's litigious world everyone is worried about insurance premiums and being sued. If you want to do business with these GC's you'll have to bite the bullet, pay for the WC insurance and just include it as one more of the costs of doing business.

 

[howardrichman]

Bottom line is that in today's litigious world everyone is worried about insurance premiums and being sued. If you want to do business with these GC's you'll have to bite the bullet, pay for the WC insurance and just include it as one more of the costs of doing business.

True; Just cant let them know your charging them. You'll just have to hope the EC's whom are bidding with you are also fully insured and also charging. I'll have to charge more appropriatly for small jobs and service calls to ALL customers.

HR...

 

[69gp]

I've been licenced and worked in this industry for 30 years, I usually work alone and charge a fair rate to residential customers. At times I'll get some decent work from the local General building contractors. It seems recently in the last couple of years, I'm getting requested more than ever for a certificate of insurance w/ workers comp included w/ my liability insurance. The coverage is based on a minimum of $32K, and will cost me approx. $2000 yearly additional. Two of these contractors are threatening to drop me w/o it. They tell me they'll have pleanty of work for me to cover it, thats a gamble on my end; but; if so,as i see it my rates for them will have to increase or add an amount to the contract bill, after I divide the few builders I'de work for, which they'll see and be objective esp. getting the smaller 1 or 2 day jobs . I'm sure your all going through this if you operate a medium/large business with employees, but what does the sole electrician do? The rate is something like $5.5 per hundred of labor, which is easy to calculate before bidding or giving a bill, and just have them deduct that amount. The builders make it sound like a chore for them or their insurance auditor to calculate. They'll usually keep pushing for it, or just send the last payement w/ a big chunk deducted out, or the threat of holding the last check indefenetly till i get the insurance. Not Easy!

any help appreciated...
HR...

If you use Quickbooks for accounting and run payroll through it you can get your workers comp from the Hartford insurance if you qualify. I switched over to this a few years back and I was able to save about 40% on my premium. The other good thing about this is that you do not need to to put up a big chunk of change upfront. Basically you pay as you go and have auto-deduct the following week. Works out nice as you do not need to do an audit every year as they already know what your payroll is. There is a onetime setup fee when you enroll mine was $300.00 a few years ago.

Steve

 

[kwired]

True; Just cant let them know your charging them. You'll just have to hope the EC's whom are bidding with you are also fully insured and also charging. I'll have to charge more appropriatly for small jobs and service calls to ALL customers.

HR...

That is the problem, they want to hire/contract guys that are cheap, maybe don't know how to run a business, that has little or no overhead to add to the rate, that eliminates all the real professionals, yet they expect professional results. Then they turn around and complain or even open lawsuits with the subs as well as the clients over what was or wasn't done when a real pro would have given a fair effort to have all the bases covered.:roll:

 

[97catintenn]

It is to reduce the GC's premium. With workmans comp also comes an audit at the end of the year to see how much they really owe. If the GC can provide documentation that all the subs had workmans comp, then he owes the bare minimum. If all his subs provide documentation of workmans comp but you, then the GC has to pay for your coverage...

The insurance agent is telling the GC to make sure everyone on his job is paying for their own workmans comp to keep his rates down.