Hello Gentleman, (I use that term loosely)
I looking for some opinions about Liability Insur. & Workmans comp.
I’m a Contractor here in California, I have 1-3 guys that work for me throughout the year and my work ranges for small additions, remodels, decks to Large Custom home framing.
Basically, wether or not your a small Contractor or large, we are getting bent over and screwed buy the Insurance Companies. And I don’t mean buy just a little!
Workmans Comp just shot up to over 50% for wages under 23.00 hr. not including the rest of labor burden.
And examples of Liability $6000.00 in 2001 to $23,000 in 2002 to $40,000 in 2003. with no claims.
If your bidding on jobs and trying to run your business the “right way”, how do you all of a sudden add $20,000 – $30,000 to jobs you allready have going or just got.
In most cases around here the smaller Contractors won’t carry liabilty and the larger Contractors are thinking twice.
We’re trying to get rid of all the guys that are woking without Licences, but the fact is when I put together an Estimate for small additons or frame jobs and I get down to the bottom line…I shake my head and wonder how it gets so exspensive.
I don’t blame the owners for getting the guy down the street to work buy the hour and do the best they can to get the job done.
I wouldn’t be able to work that way because I still have all the cost of trying to run my business the “right way”.
Howie
Replies
I'm about the same size operation and scope as you here in Oregon. I got whacked earlier this year and posted the same question albeit in regard to liability insurance. I'll try to search for the thread.
Jules Quaver for President 2004
Well, couldn't find it, but the issue has been discussed here a lot. If you do a search for "Contractors Liability Insurance" in the business folder, there is a bunch of discussion.
Jules Quaver for President 2004
"Hello Gentleman, (I use that term loosely)" ????
Howie, Howie ,Howie... It looks as though you just want to rant, because there is probably nothing you can do but bend over and try to smile.
Privitization Howie, and the fact that any putz with a lawyer can sue your family jewels away from you and the fact that treatment for even a simple jobsite injury could run into hundreds of thousands of dollars is the reason, Howie.
Up here in Canada ( I know, here it comes ) I get $1M liability coverage, which also includes $10K for tools, $30K for materials and a whack of other coverage for less than $500 American annualy. If you include my Workers Comp and Medical coverage, I'm pretty much covered completely for about a total of 1K American per year.
You may say that because several hundred people don't have their hands in my pockets or that someone can't buy a small island after stepping on a nail at one of my jobsites that I'm "subsidized". Am I?
( your logo here) Turtleneck
OHMAGAWD!
I've been looking for insurance at a reasonable rate for nearly a year. They are quoting me $1000.00 with 500 deductable for 1 mil liability coverage, not including Workman's comp.
Where are you getting your insurance? What company? At my age, my fingers & knees arrive at work an hour after I do.
Aaron the HandymanVancouver, Canada
Wawanesa Insurance, its a contractors package, they have several. Actually I couldn't just buy the 1M liability for $300 Can. without purchasing some property coverage. I opted for tools and material at $413 Can. Total package $713 yr.
My Broker is Bonavista Insurance in Calgary( your logo here) Turtleneck
Yes, I'm ranting !
But the the costs are increasing so fast and so high here that you can't charge the customers that much more in a short amount of time and still get or keep the work.
And if you say you need to increase the volume of work to compensate for the cost you loose the hands on, quality and control of the jobs. As we all know there is a real lack of qaulified workers out there, to just up and increase the size of your business.
Besides, I like being a hands on Contractor and being proud of the quality of the Frames I do. The more complex the better!
That's why I get the work that I Do!
But dumping a bunch of guys on a job to get it done fast and always with less quality so that I can increase the amount of work I do just to pay for the increase of insurance.....IS BULL.....!
Pissed in California!
Howie
Howie-
It sucks to have to pay such insane rates, but there is one good thing- ALL the legal contractors in California will be having to pay the same ridiculous rates. This doesn't help you to compete against the unlicensed guys, but if you're doing top-quality work, you don't really have to "compete" against them anyway- let the clients who are willing to hire contractors who are breaking the law have them- they deserve each other.
Maybe if consumers start seeing the absurd prices they'll have to pay due to the insurance increases, they'll stop starting the frivalous lawsuits that cause the rates to go so high.
Bob
I realize that we compete against the same quaility contractors most of the time and the smart owners will find the right contractors to bid on thier jobs.
And I'm not worried about unlicenced workers or the handyman guys who will do it for nothing.
But as in recent months the increases in insurance are just getting to much. How much is an owner going to pay for an addition to his house or a new garage or a new custom home.
Howie-
I couldn't agree more. It's getting to the point where the cost of insurance is going to force contractors to go uninsured/unlicensed, and/or cause homeowners to stop buying services.
Our legal system is to blame, since anyone who gets a mildew stain in their bathroom can start a multi-million dollar lawsuit, and even if they don't win, the builder's insurance co will either drop them or raise all of our rates. What can we do about it? I'm not sure- but something has to happen.
Bob
I think your claim is a good one. Seems the whole country is jockeying for position. You need to make a business decision on your findings. Seems companies that have pioneered unconventional changes are winning. Come to think of it history channel said the same thing about past wars. I quit contracting out to the public. Im still doing the same work , but I own most of it.
Reality has struck again . I have rentals producing top dollar , but the market is soft for the money available from renters. Tough market already. We just had a reappraisel of property that was of course directed at higher taxes. Now, we are going to have another raise because of tax deficiencies to support our schools , prisons, law enforcement,etc. We have been ruled inadequate by the supreme court in what our state provides a student. Property owners must pay! Insurance was raised by 40 percent excluding terror which includes vandalism. So under insurance law Im not covered under the act of destroying property. I must bring suit against the party my self. So, in reality my insurance isnt covering me and its costing more. It is my belief that the renters cant stand the increase. Its time to sell , not hang on to problems that are out of my control. Hopefully I will be doing something different next year.
Tim Mooney
Wow Tim, sounds like a big headache. I'm afraid it's going to get worse before it gets better.Half of good living is staying out of bad situations.
The other...proper application of risk.
Thats the way I read it. Howie is experienceing what many are in the building industry. This is not bull;
We all are given tax cuts, but Arkansas cant pay its bills. We are then going pay more property tax to make up for the cuts so we can feed prisoners,and teach our children while dropping small school districts and building consolidated school systems. A big percentage of property owners here are retired . So,... Bush gave it back to the working and ended up robbing the elderly in this case. Insurance has doubled. Canada lumber has a surcharge on it but othercountriesare paying nothing . Plants across Arkansas are starving or gone under even though we only pay roughly minumum wage. Merchandise isnt selling unless its 50 percent off. Now it looks like we will be going to war on a depressed economy.
I heard of a cancer eyed dog with gonads gone from a pack of coyotes. From the exchange he got a crippled hip and leg. Hes called Lucky.
Tim Mooney
Yeah, the tax thing is another issue...Oregon is in deep doodoo for a number of reasons, like most of the other states, but what annoys me are the tendencies for lawmakers to opt for excise taxes and gambling revenues to make up shortfalls.
Some of these, like fuel taxes, can be itemized...most of the others (tobacco taxes, access fees to public lands, booze tax, lotto or video poker, ad nauseum) are not deductable and create a double taxation scenario. While I don't spend money in many of those areas, the revenue sources are easy marks because the lobbies are small and the bitching is easily ignored.Jules Quaver for President 2004
Howie,
A lot of tradeoffs were made, but this is one of the many reasons I work by myself now. I don't have to add comp., liability, fica, unemployment, paper work up the ying yang time, Maing sure there is always work, etc. etc. etc. I tell customers I will take longer, but my costs don't include the above. Like I said, trade offs.
Don