*
I’m a sub contractor in N.Y. I have my
own liability insurance, and workman’s
comp on the advise of my insirance
agent, other carpenters, and the GC I
sub for. I have one question- why do I
carry comp if I don’t and will never
have employees? A friend says he doesn’t
carry it just because. Kind of silly
answer, but a good question. Any help?
Thank
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Does it cover you if you get hurt?
*Hi Jim- no, i'm not covered. It's for anyone who works for me only. The GC whom I work for told me I need it, and that it's a crazy requirement for New York state. It's $875 a year for nothing.
*That's a lot of money for something that has no function. I think in some states, If GC uses a sub, and that sub does not have WC on an employee who gets hurt, the GC can be forced to take the WC claim against his account. At least here in WA claims against your account can alter your premiums because excessive claims shows poor safety practices. Maybe your GC is just tryin' to cover his ass. There might be some way for you to negotiate some type of change in his normal requirements to have all subs carry WC. Maybe sign some type of legally binding document saying you do not, and will not, have any employees on any of his work, and assume full responsibility. It might be worth a call to you state's Dept. of Labor+Industries to see if this is their requirement, or the GC's.
*..........here's the skinny in RI....and most states in the NE are fairly similar...as a GC (and ANYONE with ONE employee) I'm required to have WC, if I hire a sub, he has to issue me a CERT. INS. showing that he is covered for WC and GL, and his GL has to be for the type of work that he does, roofing, painting, framing, etc..If I hire a one man band (and I have hired and still do hire many of them) then he has to give me a Cert Ins for GL, and either a Comp Policy or a DWC11B, (Certification of Sole Proprietor, Sole Corporate Owner, or Partner) this Certification has to be witnessed and a copy is sent to my insurance carrier.If I don't get a Cert. of Insurance or a DWC11B, then at the end of my insurance policy period, I will have my annual audit, and every dollar I paid to a sub , every 1099 I paid to an Independent Contractor, every buck I paid to anyone other than a material supplier will be added up and a MANDATORY assessment will be made against me for the addtional premium. The last time I had one of those it was to a plumber with no employees, and the assesment was for ONE HALF of what I paid him (by LAW they can assume that half of the money is for his LABOR), if I don't like the assessment I can get CERTIFIED payrolls from my sub (FAT CHANCE) to prove that the assessment should have been LESS.The amount is then determined based on the WC and GL rate for that TRADE, not for Carpentry, or Office work or whatever...This year the auditor was extremely efficient and very friendly, she came in with her laptop, went thru my records , told me how much she like QuickBooks Pro.... almost pleasant.... and told me I had two days to get Certificates from the two subs that I didn't have on file..luckily , they were both insured and all it took was a phone call from them to their agent...I used to carry Disability Insurance on myself..I can get injured on the job just like my guys....after I incorporated I elected to cover myself (we can do that in RI) so now if I'm injured on the job I have the same coverage as my guys...downside.....I pay a premium based on my paycheck...I would probably be out of this business if I had to continue the way it was....most of the workers in RI were not covered by WC, since it used to be that you only HAD to have it if you had 3 or more employees...all the fraud, and so-called Independent Contractors, and non-employees, what a bunch of crap...as an employer, you are still required to pay for injuries suffered by your employees, and support them if they can't work...that's the law...so the reponsible contractors had COMP and the rest took their chances...and the poor schmo who got injured, how was he going to pay for anything,... these same smooth operators usually had everthing in their wife's name so there were no assets to go after...you tell me why a GC should hire anyone without Comp and GL....or why a homeowner would want anyone working on their home without insurance.....b mumble...mumble.....mumble
*Here in WA we just have to have the Sub's liability ins proof. It's standard procedure, you ask the sub, he asks his agent, the agent FAXes over the certificate, every year you get a new one from each sub. Pretty straight forward. I've never run into this WC thing before, but I know a guy from here in WA was runnin' crews down in CA for a clothing store chain and went belly up when a sub didn't have WC on an employee and that employee got hurt, and they went after the GC, who didn't have WC either, and had to pay some real stiff fines out of pocketIt's real easy to buy a compressor and a couple guns and a ladder and call yourself a sub contractor here in WA. Maybe 300.00 in licensing and bond and another 300.00 in insurance and you meet the minimum. There's a lot of guys around doin' just that. Payin' guys under the table, takin' cash and lyin' to the government. Bad ideas. Every one. Very, very risky.
*Jim, it's the same here as far as certificates and liability. If the sub doesn't have one the Gc pays heavily. And as far as cash goes, that can last only so long. Seems like a huge risk on everyones part.I think I'll have to call the Labor Dept. Than
*I have a question. Would you buy an insurance policy on a car you don't own? Somehow, you either have a very stupid agent, or a very dishonest agent. In either case, WC policies are audited annually to determine the exact number or employees and their annual hours worked. That info will determine an "adjustment" on teh annual premium. Knowing that, I would contract the insurance carrier, show verification that you had no employees either at the the date the policy went into force, and did not hae any employees to date. They in turn should issue you a check for the entire premium amount since "legally" there was no coverage and there was no coverage due to the "conditions" of the policy. If "nothing" is covered under teh terms of the policy, in effect, there is "NO" policy.Now, get your own rear end covered either on WC or a disability policy. You cannot not treat yourself as a second rate citizen. Actually, you can, but then you would be a jerk, as I was for many years. Sure, save your customers money at the cost of your own future. And if you can' make enough money in you business to cover the cost of covering yourself, then you should not be in business untill you learn how to.Finally, take an evening course on Business 101 or at least on the basics of being self employed.
*No, you don't need worker's comp in NY if you have no employees. Who have you gotten the policy from? Probably, a private policy, judging from the price. You can buy worker's comp direct from the state for about $175 a year for one employee. But you aren't an employee, unless you are a corporation. If you're a sole proprietorship, then you can't collect anyway. Cancel the policy and demand a refund of premiums for failure of consideration. There was never an insurable interest and hence there was never a risk. SHG
*Hi. I'm new here on this board, but now that I've found you I'll chip in from time to time.We have the same catch 22 here in MD on this issue between the state and the insurance companies. Sole props are not required under Home Improvement law to carry WC on themselves. However, as a GC, our WC policy is written so that we pay 100% of subs billings if they don't carry a certificate of WC and we can't split out the direct labor portion of the billing. If we can split out the labor, we pay on the BILLED rate, not wages. Some subs have gone to employee leasing firms who handle their payroll functions as well as WC and other insurance needs rather than get the state issued policy (also about 850. minimum premium in MD.) We tried the insurance company and several state agencies to find that elusive certificate of compliance that someone else mentioned as an option in another state, but to no avail. So either the sub has to purchase what seems like an expensive policy, or we pick up a larger tab. As far as them getting money back on audit, the insurance company has a minimum premium line item they use that basically is a fee to issue the policy and is nonrefundable whether there is a premium basis in wages or not. We did write up a disclaimer form for one of our subs this year and will see how it flies at audit, but I seriously doubt if it would preempt his ability to come back on us or the homeowner for liability should something happen to him on our job.What I really want to know, however, is how the work comp issue impacts the homeowner. Does anyone know whether the employee or sub's right to sue the homeowner is mitigated or negated if they are injured on the homeowners property and they have been provided with work comp coverage? What about the sole prop... what are their rights to compensation for on the job injuries since they have no insurance package?
*Ken, here in Florida, our innovative lawyers have started a new type of TV advertising "shouting" like the auto dealers, that workers comp "benefits" may not be sufficient to cover all of the injured tradesman's out of pocket costs plus living expenses. So "they", the lawyers, may sue property owners and/or general contractors to obtain additional monies. Deep pockets is no longer an issue - any and all pocket will suffice regardless of depth since they are all "tapable". The above is just another reason why I contend that any contractor who still feels a 5% to 10% net profit is suffcient for the legal risks we assume as business owners. 15 % to 25% is more like it. For that same reason I pity the poor soul who is really just working for wages with almost zilch for net profit.
*.......Ken.. et al......my understanding is this.... A Sole Prop. or anyone injured on a job that is NOT covered by WC is at the mercy of the courts..suppose he's laid up... and he's going to lose his car and his house....but he can find a lawyer who'll take on the case for a contingency.....they can go after the GC, and or the Homeowner....my OLD agent says that the homeowner doesn't have to worry because the Homeowner's Insurance Company will defend him....Ok, so they clean out the assets of the GC, and he's still needs lifetime care... did we exceed the limits of the Homeowner's Policy...I hope not..Is WC a solid firewall against financial responsibility ?Perhaps not, but it's the ONLY firewall that I know of, (I do have an Umbrella for liability in excess of my limits, which is relatively cheap)...Those forms taht I discussed above, which are accepted in RI, for entities with NO employees, do not (DO NOT) cover anyone who is committing fraud ..as is the case when someone says they have no employees...I'll give you another of my all-time favorites...I lost a job I had designed and priced, it was the third job I had done for the Owner....he hired a GC who had no employees.. every day the GC and three guys would show up and build this beautiful structure....and every Friday the Owner would make out a check to The GC, and one to each of the guys for their hours that week...Who was liable? I think the Owner and the GC were both liable... and not just for Injury,, but also for withholding taxes if any of these guys got in a beef with the IRS...but you figger it...there are some real sleezebags out there
*Mike, in Florida, in the latter case you exampled, that owner would be in one heck of a heap of trouble. By paying the "helpers" directly, he would have been considered as acting in the capacity of a GC, subbing out to those helpers and the GC and as such, was mandated to cover them with WC and deduct for all FICA and employment taxes. Also, just before I left Mich., I read where some insurance companies that offered home owner coverage were changing their policies whereas home owners would NOT be covered if they hired a "non" licensed contractor and he got injured. It resulted from a woman who hired a non licensed contractor to do some roofing on her barn. He fell off the 40' ladder and died. His wife sued the owner and her insurance carrier and they paid big bucks.
*Mike, when you said...>Those forms taht I discussed above, which are accepted in RI, for entities with NO employees, do not (DO NOT) cover anyone who is committing fraud ..as is the case when someone says they have no employees... I think this is a good reason in itself for any GC to INSIST that any sub have WorkComp. Who's to say when that sub might happen to have a buddy "stop by" to help him unload a truck or lift a beam in place... I have known contractors who have used their kids to help out during the summer. They don't think they need work permits since they are their own kids. They also don't think that the friend who helped them out is considered an employee because he just "helps out" on weekends or evenings or when things get real busy, and he pays him "cash out of pocket", so there's no payroll, no FICA. Or it's the other uninsured contractor who barters wages to help out each other --- (WAGES - is that a clue?)Look, I don't think any one of us wants to look a client in the face and have to say, "sorry you lost your home, we just didn't think..."
*In NY state any business has to carry a comp policy, employees or not. Minimum premium for acontractor is about 1000.00/year through the StateInsurance Fund. They conduct an audit at the end of the year, if there were people paid from your account that you have no certificates for, you pay the going rate for that trade. ~15% for carpentry, ~17% for painter etc.
*
I'm a sub contractor in N.Y. I have my
own liability insurance, and workman's
comp on the advise of my insirance
agent, other carpenters, and the GC I
sub for. I have one question- why do I
carry comp if I don't and will never
have employees? A friend says he doesn't
carry it just because. Kind of silly
answer, but a good question. Any help?
Thank