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workman comp ????

Discussion in 'Business Fundamentals' started by zackman, Oct 13, 2009.

  1. zackman

    zackman Member
    Messages: 43

    Can someone please explain to me why you need workman comp if you have NO workers just subs that you give 1099 too. I am reading and reading and still cannot find out why we need it. I have worked for someone in the past and just started last winter for myself. I have the commercial insurance 1mil and liability 1mil have the taxes all set up just the workman comp is stopping us from putting out some larger bids..

    Any info would be great
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Who said you need workmen comp? If it's yourself you do need it. All else fails just call and ask your insurance agent.
  3. NorthernSvc's

    NorthernSvc's Senior Member
    Messages: 781

    just get it anyways....mine is based off my payroll = no payroll = no $ payed to insurance, why not have it?
  4. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,584

    You dont need workman's comp if you have no employees.

    Customers may require it anyway, larger management companies are notorious for this, they're trying to protect themselves in case someone with your company gets hurt on their property.

    Every state is different, but MN has an assigned risk plan that costs under $600. It basically gives you nothing other than a certificate. We had to do this years back when we didn't have employees yet, only subs, and it was a good move, as we were able to land more substantial work. You just have to weigh the odds of what it's worth to you. A good insurance agent should be able to advise you what your options are in your state.
  5. dan6399

    dan6399 Member
    Messages: 87

    I dont believe you need workers comp if you work by yourself. However if you hire subs you do need it. If the subs have there own then you'll be allset if they dont then it goes onto your policy. I think thats basically how it works in Ma.

  6. lilweeds

    lilweeds PlowSite.com Addict
    Messages: 1,178

    You need it to sub, unless your state allows you to op-out. If you in PA you have to file with the Dept of Labor, they will issue a certificate.
  7. AC2717

    AC2717 Senior Member
    Messages: 690

    You need WC, Trust me. If you are subbing out work, you are acting as a General Contractor and as such, law states that you are basically the boss and must carry WC for the subs.
    Now with that said here is why: If your sub does not have it and his employee or he himself gets hurts you are responsible. If his WC lapses and his employee gets hurt you are responsible, all because they are doing work for you.
    Now here is what you should do:
    Require all your subs to give you certificates showing that they carry WC. This will cover your behind and the agents and your insurance carrier and keep the losses of your records which will result in credits against your premium, but if the losses are your WC policy it can have a negative affect on your premium. Now you should require these once a year, even though this will not stop the WC of your sub from cancellation your coverage will cover you in case it does and will pay out if somone who is working for you (i.e. a sub) gets hurt. You can purchase WC for a minimal fee either from the state or with a standard Carrier. You will need the base the premium off of your payroll, since it is just you and you are a Corporation, I am guessing here, you can use the minimal manager/owner payroll which in MA it is $52,400. IN the event of a claim and you do not have the WC they will have every legal right to Sue you and go after everything and it will happen.
    Do not forget it is a tax right off, and not having it you can be shut down by the state if they come to the site and ask for proof, and the fines can be huge.
    Remember as you are acting as a GC and if somone gets hurt while performing a job for you whether or not he/she is a direct employee of you, you are ultimatley responsible. Does not matter how they get hurt, it is the law - state and Federal. I suggest a minimum amount of $500,000/$500,000/$500,000 limits, possible quote $1,000,000 for each limit as well. Also remeber a employee or a sub getting in a car accident while working for you and gets hurt he/she is automatically covered under WC then they have to chase the auto insurance of the person that hits them or if they cause the accident and get hurt it goes directly to WC.
    Last edited: Oct 19, 2009
  8. Bolt-1

    Bolt-1 Senior Member
    Messages: 103

  9. sonjaab

    sonjaab PlowSite.com Addict
    Messages: 1,425

    IF your doing any licensed business in NEW YORK state as a DBA/s-corp/LLC etc. and
    doing any kind of business/contracting work etc. even if you have NO paid employees you
    must carry a NY state workers comp. policy!

    Our wonderful NY gov't changed the laws a few years back!

    Call your state unemployment office to be sure because the fines and penalties are stiff!
    Last edited: Oct 20, 2009
  10. grf_1000

    grf_1000 Senior Member
    Messages: 295

    in michigan and your a sole proprietor their is a form to sign that lets you not need comp. this only applies if you dont sub anything out. only if its you doing all of the work with your equipment. i use it if i put on a guy and his truck. if you want a copy to see what it is just let me know.
  11. AC2717

    AC2717 Senior Member
    Messages: 690

    Be that as it may how you can get out of WC, you should carry it to cover yourself, remember, just because you do not have WC does not mean that someone could not take you for everything you have. it is a harsh world, and for a couple of $100s of dollars, to me that is worth not going out of business or making sure that someone that works for me is taken care of, or at least thier family incase something happens. You all know that if the shoe was on the other foot, they would come after you. All I have to say is heed the warning, i would hate to see anyone loose it all.
  12. grf_1000

    grf_1000 Senior Member
    Messages: 295

    i agree 100% but if you are the sole proprietor and never hire anyone nor ever have any subs. WC will do nothing. here in Mi. you pay the premium and if you dont have any claim within the term you get a percentage back. then you start over again the next term. it still costs you for no coverage of yourself. if your 1 guy in a truck and never subing anything out, i'd take the money for the WC and put it twords heath insurance. just my .02
  13. AC2717

    AC2717 Senior Member
    Messages: 690

    Agree Grf1000, put it towrds health insurance, but if you ever think you will have someone working for you, like a friend for shoveling, even though you might pay him "under the Table" you are still liable. In MA you can get WC for yourself through the State, based off of a minimum premium rate. I myself, work alone, have always worked alone, I like the piece and quiet of it all, I have health insurance and have no plans of hiring anyone. SO for me I would not purchase WC becuase I am not going to go after myself, but for those that might not have health insurance and can purchase WC for themselves as a Sole Proprietor then you should.