LLC, Owner, Take W.c. Insurance?

TRC

I'm just starting out in the home improvement business. I need to decide if i should elect to take w.c. insurance, as is my choice by being the owner. I will have a good health coverage plan, but is that enough? I would like the piece of mind of having the wc but it's so f'n expensive! NJ mandates that as a new company I will pay $11.76/$100 of payroll. I know i will have to pay for my employees but if I end up paying myself a decent salary it will end up killing me.

Any thoughts?

BTW: love this forum!

Nathan

TRC, have you gotten a quote from an insurance company to insure you as the owner as well? Most companies that I've seen don't like to do this and some will jack up their rates if you do.

For my business, I do very little if any manual labor so I'm exempt. Its a tough call though.

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

Grumpy

Most owners dont insure themselves with WC because they are not likley to sue their own companies.

Then again some one man shops will insure themselves so they can show the customer that they have WC.

Grumpy

Then again my above post was predicated on the assumption that you personally have health insurance on yourself.

TRC

My quote as an owner is the same as anyone else except that i have to pay on a minimum salary of $29k, same rate: $11.76/$100 of payroll.

I do have full health coverage so i'm thinking i will sh*tcan the idea of covering myself on WC too. I'll end up paying so much in insurance overhead that i can't be competitive on pricing. I'm paying $1749 for the year on liability as well. This is a special program that doesn't change with salary but is fixed for 2employees. Otherwise it was going to cost over $3k. I know a lot of this is so expensive because I'm a new business. Man they really hit you pretty hard...especially in NJ.

Unregistered

Here in CA we have the same option. But I doubt anyone would include themselves in W/C. I would kill to pay the rates you do. Look at the cost you will have for a year and talk to your regular insurance provider to see how you can better cover yourself for loss of work in the case of an injury.

WC (out here at least) is a complete joke. We pay $20-$50 per hundred depending on the trade. Roofers are $70+. And we have one of the better providers with zero claims.

Do the math..for one lead framer I spend over $2K per month for W/C. And niether he nor I get anything out of it. Think about what kind of benifits I could set up for these guys if I had control over those funds.

TRC

Rick thanks for that. I think i found a pretty decent local agent after talking to a few that i wasn't so happy with. The policy is with an excellent carrier as well, so that's good.

Man the CA rates are ridiculous it sounds like. I guess it's all passed on to the customers. Someone in that state needs to make some noise about that. Sounds like a job for the terminator!

Anyway, i'm calling my guy to tell him that i'm not electing to take the wc for myself. This will save me some serious $$.

Changes HI

I am also in NJ and i agree the prices are pretty high.
I don't know about LLC's but a Corporation does NOT have to cover the owners with WC in NJ. I have a 500/1 Mil G L policy in NJ and I pay $1250/yr. Not bad. HOWEVER my Commercial auto insurance is ......... are you ready? ......... Don't fall........ $3500/yr for 1 truck with full coverage! Granted i don't have the BEST driving record and the truck is an '05 (recently traded in my 04' pickup for a van. The pickup was my personal truck, I traded it for the van.)

theman

In New York You can't get a building a building permit with out w/c or an exemption. There is a big change in the requirements for w/c, if you are working on an existing SFD, can't work more than a total of 40 hours ( all contractors) in any one week. Hearing the talk from contractors the cost is second to Calf.

Unregistered

You need to show WC cert. to pull permit in CA too. A one man show can sign an exemption form, or obtain an certificat only policy.

TRC

I'm working on quotes for commercial vehicle ins. right now. I should have it soon. I'm buying an old van though so it shouldn't be nearly as high.

Wow, NY & CA sound much worse than NJ. I'm pretty sure NJ doesn't require WC to pull a permit, not for the owner anyway.

Changes HI

No you don't need to show WC to get permits in NJ (well any towns I've worked in anyhow) HOWEVER I hope you applied for your Contractor license cause after nov 11th or 9th.... I don't remember which you will HAVE to HAVE a license to get permits in ANY town.

TRC

Yes, i know about this ChangesHI. But there are forces at work to try and postpone it. I haven't applied yet because my insurance doesn't take effect until 11/1 and you have to have proff of 500k liability to get the license.

Check out this link:
http://www.state.nj.us/lps/ca/contractor.htm


it seems you just have to have proof that you submitted an application by 11/9 to be able to pull permits, this is in effect until 2/7/05 from what i can gather.

Changes HI

Yes that's true i just sent mine in like a week ago. I got a 1,000,000/2,000,000 GL policy from my agent for $1250/yr and was in effect an hour after i handed him a check. O And also my auto insurance premium is higher than quoted! $3810/yr Damn i REALLY need to take it easy with driving for a few years. Altho Turning 30 a few days ago REALLY slowed me down!

TRC

Yeah i slowed down quite a few years ago now. Just turned 34 a few days ago. Is your GL policy based on your total revenue? Mine is based on having only 2 employees and is a 1m/2m policy also but it's $1750.

Grumpy

I thought GL and WC are both based on payroll.

PipeGuy

they are

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Grumpy

Yeah I thought so. I was responding to TRC's question to Changes which was "Is your GL policy based on your total revenue?"

Changes HI

According to a few agents i spoke to (now this may be related to NJ ONLY) But GL was related to Revenue. WC Is related to Payroll.

Grumpy

If GL is related to revenue it's time to be creative with your revenue.