Tag: Workers Compensation Quotes

Electrical Contractors

Insurance needs and concerns for Electrical Contractors

Electrical contractors carry unique risks that many other businesses in the construction industry do not face.  With those risks come additional types of insurance needs.  Each electrician is unique in the scope and capacity in which they operate their business.  Depending upon the type of work each electrician partakes’ in, there may be a number of types of coverage an electrician needs to secure in order to properly secure their business.  Here is a list of 5 commonly carried coverages most electricians secure.

 

  • General Liability
  • Commercial Property
  • Commercial Auto
  • Inland Marine (Tools and Equipment)
  • Workers Compensation

General Liability

Exposures at the contractor’s office are generally limited because of the lack of access to the premises. Storing materials outdoors may create vandalism and attractive nuisance hazards.  Electrical voltage is always a risk for electricians.  This is due to the risk of electrical burns or electrocution to employees or other third parties.  An electricians’ employees can cause damage to the client’s property and can cause bodily injury to members of the household, the public, or employees of other contractors.  These are risks that are covered by a general liability policy.

Commercial Property

If you own a property; no matter how small, your business needs to secure commercial property coverage. Property exposures at the contractor’s premises typically are fairly low for electricians.  This is generally limited to those of an office and storage for supplies, tools, and vehicles.

Commercial Auto

Automobile liability exposure is higher for electrician than other brick and mortar businesses.  Most electrical contractors are in transit to transport workers, equipment and electrical supplies to and from job sites.  A driving hazard is a huge risk for insurance companies to insure.  The more time your business spends driving the higher the likelihood of claims.  Those claims tend to rise in both frequency and severity.  Implementing a safe driving program and keeping up to date driving records for all employees can help limit what you pay in premium.  Age, training, experience, and drivers’ records, as well as the age, condition, and maintenance of the vehicles, are all important items to consider.

Inland Marine

Inland marine is also commonly called ‘Floaters’ coverage.  It is meant for specialized equipment that is frequently in transit as a part of business operations. The exposures often include owned or rented equipment, building materials, as well as materials being transported to and from the job site.  This is commonly needed for businesses that transport their equipment to a third party site for use delivering a service.  The most basic example of an industry that needs this coverage is a landscaping company.  It can also include any business that takes equipment away from the premises for use as a part of normal business operations.

Workers’ Compensation

Workers compensation insurance is required by law in 48 out of 50 states.  Each state has their own specific exclusions depending upon the number of employees and the scope of your work.  It is important to check with the proper governing agency in your state to determine if you are required to purchase this coverage. Even if you are not required to purchase this coverage in many cases it is still beneficial to your business to secure it.  The coverage provides you with protection from lawsuits that may result from injured employees who are injured as a result of normal business practices.  Employees give up the ability to sue for normal injuries, but get back coverage for their medical expenses and some portion of their wages while they are hurt and not able to work.  Typically they are reimbursed 60 percent of their normal wages for the time they are not able to work.

 

California Business Owners Trying to Avoid Workers Compensation Insurance

California has the most expensive workers’ compensation rates in the United States.  California Workers Compensation premiums can be so expensive that business owners try to find creative ways to avoid paying workers compensation insurance for their employee labor.  The common practice is turning employees into 1099 contractors with the thought that since they are no longer employees the business owner is no longer responsible for workers comp.  Business owners have to be very careful when doing this.  State Compensation Fund sends a document with all of their quotes defining a true Independent Contractor vs a 1099 that is technically an employee.  Some of the determining factors laid out by SCIF to determine if the 1099 is an employee or an Independent Contractor:

  • Does the business have the right to direct and control? If yes, 100% Employee.
  • If the trade requires a license, Independent Contractor must have their own license. Employees use the business owner’s license to complete the work.
  • Who provides the instruments/tools to perform the work?
  • Has the Independent Contractor chosen the burdens/benefits of self-employment?

Another commonly used band aid business owners try to implement to avoid paying california workers compensation insurance premiums for employees is to give the employees a percentage of ownership then exclude them from coverage by having them sign the appropriate exclusion form.  California business owners commonly give employees 1% ownership then exclude them from coverage to avoid paying workers compensation insurance.  The state of CA has passed a new law effective 01/01/2017 that now requires a minimum ownership percentage before a CA business owner can qualify to be excluded from workers’ compensation insurance.  Effective 01/01/2017 California business owners must own at least 15% of Corporate stock to qualify to be excluded.  If a business owner meets the 15% minimum, they must sign the appropriate workers’ compensation exclusion form and file it with the insurance company.

All existing Corporations with a workers’ compensation policy must sign a new exclusion form with their insurance company by 01/01/2017.  Otherwise the insurance carrier must INCLUDE the business owner from 01/01/2017 until a new exclusion form is signed and filed with the insurance provider.  It’s best to circle back to your insurance agent to gather the updated exclusion form.  If your insurance agent is not aware of this rule change or how to solve the problem, look for another agent such as myself.  Workers Compensation Insurance is typically your biggest insurance expense, you deserve an agent that understands this type of insurance.

7 questions to consider when renewing or purchasing a Workers Comp Quote.

When should I start looking into getting competitive Workers Comp Quotes?

For a new business this should be before you hire your first employee. Depending on the state you are operating in, the type of business you run and the amount of employees you plan to hire; it is required by law in most states to have workers compensation coverage in place before employees start working. If you are an existing business you should start shopping for new coverage approximately 90 days before your policy ends. This gives the agents and carriers you are quoting with enough time to accurately assess your business and find the best coverage at the best price possible for your business.

Why should I shop around for Workers Comp Quotes?

Unfortunately insurance carriers are not as forgiving to customers who have been a customer of theirs for several years. In an ideal world carriers would reward businesses for sticking with one carrier for several years. In reality only a few carriers operate this way and finding ones that do gets more difficult every year. This is because carriers appetites change from year to year for certain industries and particular coverages. Shopping around to make sure your premium is competitive, is something a business owner should do just about every year. That is not to say you should switch carriers every year for only a small difference in premium, but you should have the information at hand to at the very least negotiate better prices on premium with your carrier. Choosing an insurance agency who partners with multiple carriers and not just a select few can save you a lot of time finding multiple options.

Are there any costs involved with getting workers comp quotes?

No, simply getting a quote doe snot carry a charge except for the time it takes you to contact agencies and fill out the necessary paperwork to get a quote. Partnering with an independent agency instead of an agent who woks with one or a few carriers can speed up this process.

Are there any other payment options?

Yes, some agencies offer Pay as You Go Billing for both workers compensation and general liability coverage. This tends to be a good option for cash strapped and seasonal companies. With a typical Pay as You Go Policy you can get policy initiated for a small amount of money and then pay your premium monthly based upon the payroll each month. With a traditional workers’ compensation program, 25% of the total premium is due at the beginning of the term and then there are 9 monthly payments that are estimated from past years payroll. Pay as You Go prevents over or under paying because payments are based upon this years payroll and not an estimate. For most business this frees up cash for more immediate business needs.

What are your state rules and regulations for coverage?

Workers’ Compensation coverage is left up to being regulated by each individual states. In 48 out of 50 states it is required by state law for most businesses. There are exceptions to this requirement based upon how many employees you have and what industry you operate in. The Department of Labor has a list of websites for each state where you can get the most up to date information about the requirements for your state.

Does workers’ compensation cover my family members?

If you have a family business whether or not those family members are covered by a standard workers’ compensation policy is determined by your industry, how your business is classified and the role of your family member in the business. Checking with your insurance professional and state department of insurance is the best place to determine if your family members are covered by your policy and in what degree.

Does workers comp cover sole proprietors, partners and corporate officers?

Most standard workers’ compensation policies can include sole proprietors, partners and corporate officers, but it depends upon the state regulations whether those groups are automatically included in coverage. In many policies it is required to ad those officers or partners to the policy in order for them to be covered. Some are required by law to be covered and some are not. Again it is crucial to bring this to the attention of your insurance professional and check with the proper state governing agency.