insurance requirements - Contractor Talk - Professional Construction and Remodeling Forum

dayexco · 04-06-2009, 10:29 AM

i need to have my house reshingled. will be taking proposals from different contractors that i work with on various projects. when i request certificates of insurance from them, in your opinion, what should be included and to what limits? thanks in advance.

outlaw · 04-06-2009, 10:38 AM

How much is your home worth?

You want their liability to be worth at least that much.

As far as Workers Comp, the state should have minimums on that.

To make sure it is current, have them send you a certificate from the insurance company that names you as additionally insured.

Slyfox · 04-06-2009, 10:48 AM

My state 'Ohio' has a minimal coverage 'General Liability' which is sufficient.

The problem is that many contractors do not claim all and in some cases none of their workers as employees, meaning they list some or all as individual subs, thus all tho the company shows both liability and workers comp certificates it don't cover the actual workers.

So if the contractor doe's damage to your property your, it's covered.
If a contractors employee is hurt on your property, maybe your contractor will cover it, maybe your contractor won't, which leaves you possibly in a lawsuit over the liability for the employees injuries.

DavidC · 04-06-2009, 11:18 AM

Pretty much the same as Outlaw states. If you asked me to make you an additional insured though, I would have to ask for more money. Typically HO's are not additionally insured and there is an extra cost to me in order to to so. Not necessarily a bad idea as long as the cost is covered.

Certificate holder on the other hand is free and puts you on the list to be informed if the policy is cancelled.

To be really sure call the agency listed on the cert. and ask if the policy is still inforce and what the contractors claims as annual payroll to determine WC costs. I know of at least one that will pay one man for a few weeks each year as an employee. All else is paid as 1099 subs. He can produce a current certificate even though he does not cover most of his workforce.

Good Luck
Dave

thom · 04-06-2009, 12:10 PM

Quote:

Originally Posted by DavidC

I know of at least one that will pay one man for a few weeks each year as an employee. All else is paid as 1099 subs. He can produce a current certificate even though he does not cover most of his workforce.

That wouldn't work in my state. From the top down everyone must be covered. Anyone working for you (employee or sub) is covered by your policy unless you have their certificate showing WC in force at the time. The auditors check both employee and sub-c's payments.

Of course you could lie to the auditor, carry stuff off the books etc. but that's insurance fraud.

DavidC · 04-06-2009, 01:19 PM

Technically that's not supposed to work in my state either. It's not only illegal but ethically wrong in my book. The point is that it would slip by most HO's unless they knew who to ask what. A basic policy might cost $500/yr., we have 2-3 employees (except for recently) and pay thousands. Quite a difference in OH.

I only know of this trick because the CONtractor's brother applied with me for a job. I asked why he would leave his brother and he stated he was sick of being on the books for a couple weeks and under the table the rest of the time. He had figured out that he would be missing out on Soc. Sec. later in life. I'm sure that if there was an accident the injured party would suddenly be on the books again.

Good Luck
Dave

dayexco · 04-06-2009, 05:15 PM

i truly appreciate all the responses gents!!

i didn't think it would be much different than me as an excavating contractor coming and work for you, but every trade has their little things you need to watch for and it looks like you've answered my question! again, thanks much!

cleveman · 04-06-2009, 09:22 PM

I hope the trend towards naming additional insureds is stopped. That's just another $100 for each and every.

Slyfox · 04-07-2009, 06:56 AM

I'm not sure if it's just an Ohio thing or what but when I call my insurance company and ask a certificate to be sent to a home owner / contractor, Larry sends it out at no added cost.

Edited to add cost: We have -0- employees and it's over three thousand a year for general liability.
I can't think of what we might do during a re-roof that would end up with a home needing demolished and rebuilt, but if it were to happen to us,
were good.

DavidC · 04-07-2009, 08:23 AM

Quote:

Originally Posted by Slyfox

I'm not sure if it's just an Ohio thing or what but when I call my insurance company and ask a certificate to be sent to a home owner / contractor, Larry sends it out at no added cost.

Edited to add cost: We have -0- employees and it's over three thousand a year for general liability.
I can't think of what we might do during a re-roof that would end up with a home needing demolished and rebuilt, but if it were to happen to us,
were good.

There is a difference between "certificate holder" and "additional insured".

Certificate holders will be notified if your insurance is canceled for any reason. This is usually free to you and your clients, must be renewed annually if needed. It offers no further protection to the client other than you being properly insured.

Additional insured adds the client to your policy to afford them the same protection as you. This is more insurance and generates additional premium because it increases risk to the insurance company. The premium needs to be passed along seperately or included in the job. We are charged 10% of our base premium per additional insured.

Good Luck
Dave

Slyfox · 04-07-2009, 01:30 PM

I see.
I never had to or been asked to do anything other than provide certificates showing my coverage.

serrano · 04-07-2009, 07:56 PM

David C,in NY the employee is covered no matter what,on the books,off,subbs,employee,ect.. the homeowner is protected in that respect.On commercial projects it is different,the property owner has liability.The only one with his neck in a sling for major injury to an employee is the contractor oporating illigally.

Patrick · 04-07-2009, 08:12 PM

Quote:

Originally Posted by Slyfox

I can't think of what we might do during a re-roof that would end up with a home needing demolished and rebuilt, but if it were to happen to us,
were good.

Easy, drop something on a gas meter, the pipe cracks, maybe a spark and the house blows up!!!

DavidC · 04-08-2009, 07:54 AM

We may be drifting here.

Quote:

Originally Posted by serrano

David C,in NY the employee is covered no matter what,on the books,off,subbs,employee,ect.. the homeowner is protected in that respect.On commercial projects it is different,the property owner has liability.The only one with his neck in a sling for major injury to an employee is the contractor oporating illigally.

My understanding is a bit different and is based on a few meetings with my attorney and insurance agent after one of my guys took a fall. The injured employee is only covered if the contractor has a WC policy in effect.

True, the illegal contractor is wide open for lawsuit should an uninsured employee get injured on the job. But so is the HO that hired the contractor. But if the contractor has the required WC policy it also shields the HO from lawsuit by the injured employee. The WC protects the contractor from lawsuit concerning the medical expenses and lost time on the job. The injured employee may still sue the contractor (but not the HO) for negligence looking for a settlement with his liability insurance policy and assets.

The unsuspecting HO that hires an uninsured contractor is accepting the liability in case of injury by workers on his property. Maybe better put, the illegitimate contractor working with out proper insurance automatically assigns shared risk to the HO with out prior knowledge or consent.

Good Luck
Dave

Slyfox · 04-09-2009, 06:25 AM

Quote:

Originally Posted by Patrick

Easy, drop something on a gas meter, the pipe cracks, maybe a spark and the house blows up!!!

lol,
I hope you didn't come up with that example because of past experience.

But, yes, point taken, chit doe's happen.

kubie · 04-15-2009, 08:57 AM

so if my subs dont have work comp and get hurt, its my butt that get burned? i do most of my jobs myself and sometime with my bro. we are both s corps with the corp option to not have work comp. sometimes on big jibs we have 2 other subs help out. both give me a proposal on what they will do and get paid. both are sole prop and are not required to have work comp in WI. if they get hurt isnt that their problem? unless its my fault they got hurt?

DavidC · 04-15-2009, 10:55 AM

Quote:

Originally Posted by kubie

so if my subs dont have work comp and get hurt, its my butt that get burned? i do most of my jobs myself and sometime with my bro. we are both s corps with the corp option to not have work comp. sometimes on big jibs we have 2 other subs help out. both give me a proposal on what they will do and get paid. both are sole prop and are not required to have work comp in WI. if they get hurt isnt that their problem? unless its my fault they got hurt?

The answer is maybe, maybe not.

In NY the prime contractor would be responsible for any uninsured subs. We will occasionally use a sub that doesn't carry comp as a work alone sole prop, the annual audit will detect the payment and we will pay a premium to the ins. co. for the coverage. The cost is predictable and is factored into the job.

In may be different in your state.

Good Luck
Dave

Slyfox · 04-26-2009, 06:39 AM

Quote:

Originally Posted by Patrick

Easy, drop something on a gas meter, the pipe cracks, maybe a spark and the house blows up!!!

LOL, we did a lake house re-roof this past week on Berlin Lake,
driving down rt 534 we drove past a house that had recently been roofed,
still had left over shingles and ridge caps on site and I saw a rope tied to the gas line that comes up out of the ground and connects to the 'gas meter',
and went up an over the two story high, 10/12 pitch roof and extended down to about one foot below the gutter on the other side.
I have no idea what the rope was used for, but I thought of this post as soon as I saw it.
Hope they were insured, lol.