Hello All,
I tried to comb the forums here looking for this answer but I was unsuccessful. My father and I run a very small operation in New Orleans that is starting to get bigger. We mostly do small renovations and I run a trim installing crew. We are getting ready to build a house for my uncle in the next year. Its time for us to get insurance! My question is, what type of insurance should we carry? Workmen’s comp and liability? Any company suggestions? Thank you for any input.
Replies
I had legalzoom.com form a Limited Liability Corporation for me. The cost was reasonable compared to local lawyer fees. Remember, is not always what you did, it's what you have, that brings a suing lawyer to your front door. An LLC provides you with the first tier protection, liability insurance provides second tier protection.
You better check with your state on the workmans comp issue. In my state it is an absolute must have! I would not hire anyone for one day without it. They can claim a back injury the first day and you will be paying for the rest of their lives on that claim.
The other aspect you have to consider is, Accounting. You are responsible for payroll taxes.
"An LLC provides you with the first tier protection, liability insurance provides second tier protection."Not always.The company can be liable and the workers liable.So if while Joe the president of Construction LLC might have some protection, Joe the construction worker that cuts the support for a beam and the house falls down will not be protected by the LLC..
William the Geezer, the sequel to Billy the Kid - Shoe
I am not a lawyer but I don't see how an employee can be personally liable for his actions under the direction of his employer? That would mean everyone would have to have an umbrella policy.
My point was that you can't totally rely on your insurance company to protect you. An LLC provides you with extra protection. It can't hurt.
Besides using entitys and insurance...it's probably a good idea to learn how to disguise your held assets.
For instance, if you own property that is paid for, it is crazy to hold it in your own name. Put it into a trust. Yes, they lawyers can learn about it but it makes it a bit harder. Also, put a second mortgage on it to the tune of 110% even if it's to yourself in the form of a different entity. Make the property look like it's worthless to the vultures.
<<Also, put a second mortgage on it to the tune of 110% even if it's to yourself in the form of a different entity.>>How is this done?
Putting a second mortgage is as simple as going down to the clerks office and recording it. You could use a false name if you prefer. That might be illegal...I'm not sure...but I am sure of this....I don't think you'd turn yourself in.
AMEN! My business is an LLC and I am in the process of putting my house into a personal residence trust. My retirement and bank accounts will be put into a another LLC.
"I am not a lawyer but I don't see how an employee can be personally liable for his actions under the direction of his employer? That would mean everyone would have to have an umbrella policy."When the employee in question is also the owner of the company, in a situation where the company is "closely held" (which has a legal definition that basically amounts to there not being a bunch of stockholders preventing the owner from being able to control the company), that owner/employee is responsible for his/her personal actions and can't necessarily hide behind the corporation. The specifics probably vary somewhat from state to state.A similar situation exists for doctors and lawyers, who often form closely held corporations (C-, S-, or LLC) for an assortment of reasons. A doctor who commits medical malpractice can't foist responsibility for it on his/her corporation, but has to answer to it personally, regardless of the structure of the corporation; hence, the existence of malpractice insurance. It's different for an employee that is not presumed to have independent control over his/her actions. For example, if a staff member books surgery for the wrong side or fails to notify the patient of an important lab result, that staff member would not be held personally responsible for the error or omission. The practice and the doctor him/herself would probably get sued, and depending on the particulars of the case and the law of the state, I suppose one or the other might be held liable. Most states do not permit doctors to be employed by companies in such a way as to lose their independent control of their actions.Rebeccah
Thank You!!!!!!!!!!!!!!
It drives me insane how people think that just forming an LLC makes them immune.
Heck, in some states it's no better than being a sole proprietor.
find an agency that specializes in contractor's insurance
get a package that has W/C, GL, tools, commercial auto... anything else the company / corporation owns
you can get better rates, and service if you have a package
what mike said, however on your workers comp. labors, secartary, truck drivers have different rates per $100.00 than say carpenters, so make sure agent is aware.