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Workmans Comp.

Discussion in 'Commercial Snow Removal' started by PINEISLAND1, Nov 29, 2000.

  1. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    Okay, I need some explanation an what exactly workmans comp is and who it is covering, and who needs it. I was told as a partnership, that neither myself or the other partner needed it. I was also told that immediate family members who work for you do not need it. What about a sub with his own equipment?

    I thought I didn't need it at all, but a big contract of mine with a local government is insisting I show proof of W.C. insurance.

    Can anyone help me understand?
     
  2. Michael F

    Michael F Senior Member
    Messages: 203

    I have it through my payroll co. as agent, pay as needed. I have been told that you need it in case one of your subs dosen't?? You are correct in thinking that owners don't need it and if owners have it I was told for one agent it whould be nearly imposible for me to collet on it as owner, as far as family I don't know. Hope this helped.
     
  3. diggerman

    diggerman Senior Member
    from Ames
    Messages: 700

    Unless,you are the owner of a corparation which means you are considered an employee.
     
  4. iowastorm

    iowastorm Senior Member
    Messages: 358

    I believe that federal law requires companies to have workmen's compensation on all employee's, except owners. The cost of w.c. varies on the type of business and what the employee's duties are. Obviously, snow removal and lawn care would be more expensive as opposed to an accountant, because the risk of injury is greater with the first.

    The purpose of W.C. is to ensure workers are adequately and properly medically covered in the event of injury. W.C can easily be obtained by contacting your insurance agent and giving him/her an estimate of your yearly payroll. Hope this helps.
     
  5. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    I sit on an advisory committee for CNA and on the insurance committee for ALCA, and Storm's got it right.

    Suggestion: classify your employees as 'landscape gardner' or whatever is close to that in your state. Don't volunteer that you may have employees plowing, and if you do - tell them that it is a VERY minor part of your payroll. The rate is significantly different for plowing as most insurance carriers classify them as road type drivers for plowing and the rate is (sometimes) triple the landscape laborer rate.

    If it's just you and your partner - you should be fine from a W.C. standpoint as you (generally, as a non-incorporated partnership) don't need W.C. on yourselves.

    If your agent doesn't know this - get another agent.
     
  6. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    Its not my agent I'm trying to convince, he is really good, and very knowledgable. It is the person in the govt. body that insists that I have W.C. coverage, even though its not technically necessary.

    I really don't have a choice, and I dont wanna lose the 3 yr contract.

    My agent says all but $150 will be refunded to me if I never actually have an employee.
     
  7. Lazer

    Lazer Senior Member
    Messages: 399

    You might need to buy a policy, exclude you and your partner and pay the minimum premium. They'll do an audit and you'll receive a credit.

    Sounds like it's going to cost you $150.00/year.

    On the bright side, you'll have a policy in place when you do hire somebody.

    Regardless, if you don't show proper documentation, they'll weed you out and you don't want to get into an explaination scenario.


    [Edited by Lazer on 11-29-2000 at 11:15 PM]
     
  8. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    Sounds like you've got it figured out correctly, and it appears that Lazer's assessment is correct.

    Sometimes Government garbage stinks, but sometimes you gotta do the paperwork BS to get the job. Just hope you're charging enough to cover the premium, cause you gotta shell it out to get the contract.
     
  9. iowastorm

    iowastorm Senior Member
    Messages: 358

    Not sure if I over or under read something, but all you must do to show proof of W.C. coverage is have your agent make a certificate of insurance to the entity your bidding for. Furthermore, most carriers require the first 4 months premiums up front and will let you pay monthly thereafter. Another thing worthy of mentioning is that the carrier will contact you to do an audit to see what your actual payroll was for the past year. For example, when you bought the coverage and forecasted $50K in payroll for W.C. and actually paid out $60K, they carrier would make a rate adjustment in your premiums for the next year. In my experience, it's just been a simple phone call from a rep of the carrier and no big deal. Maybe John can expound on this point, if necessary.
     
  10. BRL

    BRL PlowSite.com - Veteran
    Messages: 1,277

    Also to consider: each state has its own WC laws & regs, and some states do allow the owners to be covered. Here in NJ the law was just passed last year & is now in effect, allowing owners to have WC coverage. Many contracts that I have seen say that you must have WC at statutory levels which means that if you don't have employees & your state does not require the owner to have WC coverage, you are in compliance. Now the hard part is getting the person to understand that, like Pine said. Also, that $150.00 minimum sounds good because mine is $800.00, and I believe I was told that is a minimum coverage set by NJ (but I could be wrong on that one). I believe our WC rates are set by the state here, so no matter which agent you use the rates are the same (I could be wrong on that one too, I'll have to refresh my memory).
     
  11. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    Yup. Storms right....

    If you have a good relationship with your agent, he might just issue a Certificate showing that you have WC at Statutory Limits as needed. That would cover you, and the agent wouldn't be lying since you don't need the coverage but would have it if required - and it WOULD show up at audit anyway.

    Any company of any size gets audited by their insurance carrier each year (a real pain, and unfortunately, or fortunately as the case may be - the auditor ususally doesn't know nearly enough to be really thorough). This is why Certificates from subs are so important - a topic for another thread in the future.
     
  12. Lazer

    Lazer Senior Member
    Messages: 399

    Common sense and government are not synonomous.

    They require a certificate which includes: Insurance company, policy number and effective dates. Get them that and your set.
     
  13. Rooster

    Rooster Member
    from Kansas
    Messages: 650

    You might consider incorporating your company even a 1 or 2 man operation. If you do that you could be considered an employee under state insurance laws.

    I had a company, incorporated, and was an employee for w.c. purposes. Had a work realted accident and everything was paid for 100%. But beware policies and state regulations vary from state to state.

    Good Luck