Workers comp/ Liability policies

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
I need to know if anyone has ever listed subs by name under your own gen liaibility policy. All my subs have their own side business with their own policy, except one. He is looking at a huge price for even the smallest liability policy of his own, and my agent said for $250 he could be added under mine, but still as a sub and not an employee.

The question my agent and I wondered-

Will my workers comp policy auditor still consider him a sub if they see his name on my gen liability policy, or will they then think of him as an employee, and will I be dinged with paying work comp on him next year on my audit date?

Any advice?

I really appreciate the fact that my agent is thinking ahead for me on this, and not just trying to write another policy.
 

66Construction

Senior Member
Location
Albany NY
Depending on the auditor you might have to pay comp on what you paid that sub. One auditor I had made me pay comp for hiring a crane for a half day and not getting a copy of his workers comp certificate. Then a different auditor let the subs slide because I hadn't paid them much. I don't know if it's the same as where you are but as long as I have a certificate from the sub I don't have to pay comp on them. As long as this sub has all his federal and state numbers and stuff, and he's actualy got his own company and has a comp policy covering him you should be fine.
Casey
 

Kent Lawns

PlowSite.com Veteran
And to think I got my rump chewed for suggesting that I limit the plowing of my subs....


Pine, that's a sliver stickier than I'd be inclined to do.

Doesn't his vehicle policy cover him and your GL cover you in this case?
 
OP
PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
Kent-

Yes, his vehicle insurance covers him, and I also am covered by a general liability policy for "completed operations" for my business.

Don't you also require subs to carry general liability poicies of their own? Other than commercial auto coverage?
 

John Allin

PlowSite.com Addict
Location
Erie, PA
Very interesting question....
I'll make a few phone calls in the morning and see what I can find out from the people I work with at some of the insurance carriers that have me 'advise' them on snow stuff....
 

Kent Lawns

PlowSite.com Veteran
Pine,

Our subs only have coverage on their vehicle w/ liability.

A claim on the road is their (ins. co.'s) responsibilty.

A claim on a lot would my my GL policy.

Plus each of our operations has an umbrella.

Whether or not we are properly covered may be up to interpretation. I'm sure our agent would like to sell us more coverage.

Also, I'm sure there are variations state to state.
 
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PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
I know we have discussed this at length in the past, and I have been educated by JAA and other experts in the field many times in the last couple years.

In the literature I have from Johns company, and from the many post to the topic, they make it clear that if your sub does not have a general liability policy of their own, then your company may charge you for their coverage upon an audit.

This situation though, is actually getting their blessing on adding someone as a sub to your policy with them, (along with a check of course). So I feel that covers me, my sub, and also covers the potential problems with a GCL audit.

But- how will my other insurance company who carries the workers comp handle it? What are their criteria for defining subs as opposed to true employees. As you know Kent, in MI it is $11 + per $100 of wages for workers comp. I dont want a mistake of those proportions next workers comp audit.
 

Mark Oomkes

PlowSite Fanatic
Location
Grand Rapids, MI
Not sure I'm thinking the same thing as you are asking Tom, but I just went through that hastle with our insurance. I made the mistake of not having certificates for a couple of our subs and they were going to charge us for the amount of work they did for us. I got copies right away and saved us a nice bill, well part of it anyways, our payroll was still up because of last Dec.

Hope this helps.
 
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PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
Hey Mark-

That is exactly what I'm trying to avoid. I just feel bad for this one guy, who happens to be a good friend, that they want to charge $1500 for his policy. Its hardly worth him doing the work for that. If he could be added to mine for $250 I would do it, but not at the cost of Workers comp problems.
 

Kent Lawns

PlowSite.com Veteran
They are not paid thru your payroll and that's all the work comp folks audit.

We pay GL based on sales and therefore we cover all our subs.
Some have a GL which covers their summer other businesses, but we cover all liability for snow removal.





I mean, would your SUB get sued personally if you hold the contract? My customers have no idea who my sub is and wouldn't ever sue them directly.
 

Mark Oomkes

PlowSite Fanatic
Location
Grand Rapids, MI
Our audit was based on for the most part our payroll, yes. But some of it is also based on revenue and what you are paying your subs for, therefore because we didn't have a certificate on hand theywere going to bill us to cover that part.
 
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PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
After re reading this and thinking about what you said Kent, I wonder-

Since I have subs only, then technically I have no "payroll" the way you use the term. So if I am asked for my payroll, do I tell them we have "none"?
 

66Construction

Senior Member
Location
Albany NY
Yep tell them you have no payroll. They will probably ask to see your checkbook though. If you do carry comp and have no payroll they're going to look at you gross most likely. My poilcy states minimum and maximums they can charge me on myself and my partner. Hope this helps
Casey
 
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PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
My agent said that my $650 annual cost would be refunded except for a minimum $150 charge, if we have no true employees. We would have not even added this policy except for a couple Govt and school contracts that insisted we show a policy on the books.
 

BOB JONES

Junior Member
Location
DETROIT MI
Tom
I am in miich.also my policy is with auto-owners they cover my subs with what they call combined liability under my auto policy an other name is hired non owned auto cost me *81.00 per year.
Ipay my subs with two checks if they are paid $60.00 per hr one check is for the rental of the truck $50.00 the other $10.00 per hr is for labor i pay workcomp only on the $10.00 per hr .
 
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PINEISLAND1

PINEISLAND1

PlowSite.com Veteran
Location
Western Michigan
Thanks Bob.

I have the same company and the very same coverage on my comm auto policy. That is not the same coverage as the general liability coverage I'm speaking of. Maybe its a fact that most folks just dont worry about it for their subs.

My only problem with the way you pay your subs, is technically, if they are true subs, you shouldn't have to pay any work comp on them.
 

BOB JONES

Junior Member
Location
DETROIT MI
Tom
your general liability policy will cover your subs that do not have their own policy if you have any question you can e-mail me and i can give you my ins. agents name & number i have allready talked to her about this issue and she would be happy to help.
As for the workmans comp i do it this way if my subs do not have ins. to cover my butt
 

Plow Meister

PlowSite.com Addict
My wife is an insurance person and she came up with all the wording for my contracts. Your General liability policy should include an area to list these companies as "additional Insured". You may also want to include a paragraph about that in your actual contract with both the sub abd the property owner. Also, you may also want the subs to sign a "Release of Suborgation". This means that if someone tries to sue your sub than their insurance company cannot try to charge it back to your insurance company.

I have a ton of safety net contracts that I use. You can also go to www.sima.org and view their contracts there. I strongly suggest becoming a member.
 
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