Insurance

[JohnE]

Another thing that happens, at least here in MA: A sole proprietor does not need comp. But if he works for a GC, then GC needs comp certificate for his audit. If GC doesn't have comp cert for a sub, he pays his rate on whatever dollar amount he paid sub in that year.

So, the GC's want a comp cert for everyone. Typically a one man shop would pay that minimal amount for a policy which he doesn't need and benefits him not at all.

 

[satcom]

Hal.

For the one man operation, it is tough, here in jersey, our truck medical, is covered under workers comp, so if you have any commercial registered trucks, you need comp coverage, every state is different on comp laws, but most of the states require it, in some form or another, except Texas, homeowners, and business operations, usually want proof of insurance, both general liability, and comp, before they let you work, the reason for this is, most homeowner policies, medical payments only cover a three year period, which would leave the homeowner on the hook for continued payments on any long term medical from an injury, and the same with corporations, they don't want the exposure.

 

[hbiss]

Well, New York doesn't. The state doesn't require it so insurance companies don't provide it. There has to be a reason for this.

Even as far as licensing goes, jurisdictions (there is no NY State license) will waive the comp requirement if you are a sole proprietor. One county has a affidavit that you must sign and have notorized attesting to the fact that you are exempt from workman's comp.

So the customer want's it? Maybe they need to talk to their state lawmakers and get them to require it.

-Hal

 

[dlhoule]

the insurance companies and property owners who want to keep liability and costs down.

Hal, I agree. Too bad they don't include us in those desires. They want us to be liable regardless of our costs.

 

[hbiss]

I haven't gone into it but I suspect the reason comp and disability coverage can be prohibitive for a sole proprietor is because the insurance companies base the cost on the entire profit of the company, which is, after all, what the owner makes. That is in contrast to basing cost on the payroll of a company with employees.

So once again it's the insurance companies that are at fault. They tell their customers that any contractor they hire must have insurance. What they don't tell them is that that some contractors are exempt and are doing nothing wrong by not having comp coverage.

It should be up to the customer to carry sufficient insurance coverage to protect themselves under those circumstances. What really is the difference between my going to someones house to hang a fixture and falling off the ladder and the homeowner's brother-in-law doing the same thing and falling off the ladder? How about the babysitter or nanny falling down the stairs? They aren't going to have their own insurance.

-Hal



.

 

[satcom]

Quote "What really is the difference between my going to someones house to hang a fixture and falling off the ladder and the homeowner's brother-in-law doing the same thing and falling off the ladder? How about the babysitter or nanny falling down the stairs? They aren't going to have their own insurance."

There is a difference, if brother in law falls, he was not working for payment, both, babysitter, and nanny, are working for payment, and the homeowner should provide the comp payments for them, not too many homeowners read their policy, and usually end up, arguing with the adjuster, after any loss.

Homeowners insurance, in most cases, does not cover contractors.

 

[hbiss]

There is a difference, if brother in law falls, he was not working for payment...

But that really doesn't make a difference if the State does not require me to have insurance any more than the brother-in-law.

Homeowners insurance, in most cases, does not cover contractors.

And there's a big part of the problem. Nobody want's to take responsibility.

-Hal

 

[hardworkingstiff]

I wonder. If you get a WC policy and opt out of the coverage, does that make the GC not liable as compared to if you just don't have a policy?

I don't know, just wondering.

 

[hbiss]

I don't know, much of what we have been talking about depends on the state but I suspect the GC would be liable. Thing is he would never know it because the insurance certificate only indicates that the company has coverage, not who is included. That is exactly what I did for many years. I gave them a policy with no one on it just to shut them up. That's why this whole thing is such a farce.

The way I see it one or all of three things can be done:

1) Require insurance companies to provide affordable comp and disability insurance for sole proprietors.

2) Leave things the way they are but have sole proprietors waive their right to go after the GC or property owner if they are injured on the job.

3) Require property owners and GCs to carry insurance that will protect them if they hire a contractor who is exempt.

-Hal