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Old 08-13-2018, 07:31 AM   #1
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Default Workers comp insurance

I'm just starting my commercial painting business and I'm in the process of learning about workers comp insurance for my first job coming up here in about a month. Although I'd like to be insured against accidents and injuries I'd also like to get away with the slimmest policy possible. What's the minimum kind of workers comp policy that would cover if anybody were to show up in the emergency room with a trip and fall type accident?


I'm guessing insurance that covers falling from a 1 story roof is more expensive than a policy designed for a job where you never left the ground.
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Old 08-13-2018, 04:13 PM   #2
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Work comp is tricky. I'm not a fan of it, but also understand we need it. When shyt hits the fan...it hits the fan.



$1 million general policy is usually the minimum requirement. Sometimes $2 million, depends on the sizes of the jobs. The job and contractor will dictate what is the minimum you need to satisfy THEIR requirements.



In addition, you'll need a whole host of insurance you probably never knew you needed. How fun huh? More costs and less profit (if any). You'll soon learn why people fly under the radar if at all possible because the costs are outrageous.





One thing you'll need, in addition to your vehicle insurance, is commercial auto insurance. If your in an accident that is "work" related...your regular insurance won't cover you. Your welcome ahead of time.



And commercial auto also won't usually cover cargo, so that's another type of insurance policy, probably from a different insurance company. And we haven't even gotten into contractors bonds, etc. etc.




Hope you like commercial work and doing things "the right way". Sure is fun to have to charge 50% more for even the simplest of jobs.
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Old 08-13-2018, 06:29 PM   #3
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If you are a new company, it may be difficult to secure workers compensation coverage. It will be pretty expensive when you do.

It is based on payroll. For example, $13/$100, meaning 13% of gross wages paid as the premium. It is also usually estimated, so you will get audited after a year and sent a bill (or theoretically a refund, but I've never seen one)

It will be much more expensive to cover yourself as an owner. You might consider exempting yourself and obtaining a supplemental policy like Aflac or the like. I can see the reasoning behind this, as the coverage could be abused by an owner/operator.

You don't have much choice but to pay for, if you want the good work. Everyone will require it in commercial, and some residential.

Personally, I wish that the residential market was a bigger stickler for all of the coverages, as I have them anyway and couldn't help but weed out some of the riff raff.

Statutory requirements vary by state, but most larger players are going to require the insurance package to work on their sites.
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Old 08-14-2018, 12:20 AM   #4
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Thanks again for the continuing advice. I'm sure I'll need WC coverage, that's not really in question as I'm aiming to work for larger companies who will require it. My issue is I'm trying to figure out how to set the insurance up so it's as cheap as it can be but still cover if someone shows up in the ER. Such as...when I walk into the insurance office how do I describe what we're doing so that the insurer considers the work I'm doing low risk for injury.
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Old 08-14-2018, 12:26 AM   #5
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Quote:
Originally Posted by bradleyheathhays View Post
Thanks again for the continuing advice. I'm sure I'll need WC coverage, that's not really in question as I'm aiming to work for larger companies who will require it. My issue is I'm trying to figure out how to set the insurance up so it's as cheap as it can be but still cover if someone shows up in the ER. Such as...when I walk into the insurance office how do I describe what we're doing so that the insurer considers the work I'm doing low risk for injury.

I don't think you have that option on WC. WC is set as a percentage of your payroll. The percentage will be based on the number of employees, type of work, heights, etc. In CA we get a lower rate for workers who make >$24. That is the only way I know to lower your rate, pay the workers at a journeyman wage.
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Old 08-14-2018, 04:51 PM   #6
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Quote:
Originally Posted by bradleyheathhays View Post
Thanks again for the continuing advice. I'm sure I'll need WC coverage, that's not really in question as I'm aiming to work for larger companies who will require it. My issue is I'm trying to figure out how to set the insurance up so it's as cheap as it can be but still cover if someone shows up in the ER. Such as...when I walk into the insurance office how do I describe what we're doing so that the insurer considers the work I'm doing low risk for injury.

It all depends on your state.


Texas I believe does not require worker's compensation.


Other states like California I'm sure have exorbitant rates.





Depending on the state and their requirements, there will be ways or no ways to lower your rate and or requirements.



I do know that if you do a lot of roofing work, your screwed if they find out. A majority of insurance companies will consider your roof work to be classified as "roofing"....even if it is just roof coating. And therefore will switch your rate to roof rate %, in which case your in a world of shyt.



Good luck though.


Your insurance agent/broker should be able to help you out on questions you may have.
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Old 08-14-2018, 05:05 PM   #7
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My workers comp is based on payroll expense... The more you spend on payroll, the higher your premium will be. I believe the insurance company I have, sets a 1 person, 10K per year payroll minimum (excluding owners). I have more than 1 person, so mine is higher than the minimums. many WC insurance companies like to audit yearly, to see if your payroll matches your insurance.

they will also base premium on what type of work you do. "contractors / building trades" are its own grouping, then some places get more specific. Sometimes they want to specify if you do commercial or residential, interior or exterior...

I would look into finding an honest insurance broker to work with. It can get very complicated, and the last thing any one needs is to be denied a claim after something goes wrong.
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Old 08-14-2018, 06:26 PM   #8
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Don't even get me started... for a small company such as mine with only 2 full time and 1 part time employee excluding the two owners from compensation if something goes wrong it's over 14,000 a year that is crazy... people wonder why painting is "expensive" and don't think that painters should be able to charge a fair market price not considering they pay all the required insurance according to their trade. "Oh it's gonna cost that much for a living room, kitchen, and staircase? It's not that much work. You come highly recommended but I think that's too much." I was recently opened up to a new 4 letter word NEXT!


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Old 08-14-2018, 11:38 PM   #9
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I have had w.c.in two different states and had private carriers for awhile but the premiums got out of hand and went to state run w.c. In lots of areas the state run program is all you can get and has better coverage. Many private carriers have pulled out of the w.c. market and the states have had to come up with their own or no work would get done. That's the way it is with health insurance, esp. in rural areas where I live.
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Old 08-15-2018, 12:11 PM   #10
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If you are new it is usually hard to can this kind of cover but I would recommend you shop around to try and gain this cover as it is imperative in my opinion
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