I’M A LICENSED GENERAL CONTRACTOR IN THE STATE OF CA. AND I SPECIALIZE IN CUSTOM RESIDENTIAL FINISH CARPENTRY. I WORK BY MY SELF. I RECENTLY HAVE BEEN LOOKING INTO GETTING SOME LIABILITY INSURANCE SO THAT I CAN SUBCONTRACT TO OTHER COMPANIES. EVERYONE I TALK TO SAY THAT I NEED A 1 MILLION DOLLAR POLICY WITH A COST OF ABOUT $1,200 FOR 1 YEAR! I’M THINKING THAT’S OVERKILL! I’VE BEEN WORKING IN PEOPLES HOMES FOR NEARLY 20 YEARS NOW AND THE WORST THAT HAS EVER HAPPENED IS CHIPPING A PORCELAIN TUB. MY QUESTION IS- AREN’T THERE POLOCIES FOR SAY $100,000 ? OR $250,000 ? IS THERE ANYTHING ELSE I CAN DO OR AM I AT THE MERCY OF THE INSURANCE INDUSTRY?
MCSX35
Replies
Here in NY as long as your receipt totals for subs doesnt exceed 15% of your gross you are eligible for liability insurance at a much more reasonable rate.
J. D. Reynolds
Home Improvements
"DO IT RIGHT, DO IT ONCE"
I'm in PA. I can get by with 300K. As a sub...that's what most companies are looking for also......that being...me working for them as a sub. I can also upgrade my policy with a phome call and a check......then have any ballance refunded after the job and I go back down to $300K.
Good question for the local insurance dude. Find a good agent....mine's saved me plenty of money while protecting all out stuff fully. Jeff Genius has it's limits.....but stupidity knows no bounds
well MCSX
You probably can get by with less. Depends on what the guy you are subbing to requires. But just for arguing sakes lets say you put a finish nail through a wire. House burns down later. Contents, people hurt, etc. 1 mill won't be enough. I know it hasn't happened to you yet but.....
We carry 1 mill and 1 mill umbrella on top.
SCRAPR,
THANKS FOR YOUR REPLY. I GET THE POINT OF YOUR MESSAGE. ARE YOU BASED IN CA.? I GUESS THE NEXT QUESTION IS- LEGALLY, HOW MUCH OF A POLICY AM I REQUIRED TO CARRY???? INSURANCE BROKERS MAKE IT SEEM LIKE IN CA THAT 1 MIL IS THE MIN. . THE COMPANY THAT I'M SUB-CONTRACTING TO SAID 250,000 WOULD BE SUFFICIENT. MY FRUSTRATION IS NOT BEING ABLE TO GET A DEFINITIVE AWNSER!!!!!! DO YOU HAVE SOMEONE YOU CAN DIRECT ME TO FOR INFO? GOING BACK TO YOUR REPLY- IN THAT SCENARIO- WOULDN'T THE COMPANY I'M SUBING TO BE PRIMARILY RESPONSIBLE FINANCIALLY? THUS MY LIABILITY INS. REQUIREMENTS LESS????
THANKS, MCSX35
I just put forth this question over in the JLC forums but on reading this discussion here I thought it would be apropos to put it forth here too.
Over the last three years or so more and more a General Contractors are asking for a Hold Harmless Agreement as part of our submission of insurance certificates. I was wondering what your takes were on the pro and cons of this from both the viewpoints of a General Contractor and Sub-Contractor. For all the books I have on contracting researching this has been pretty much a bust in that none of the books that I own mention anything about it.
A partial definition of Hold Harmless Agreement that I found online stated:
--" A Hold Harmless Agreement is provides that one party, the "Promisor", will be responsible for all damages and liability, including legal fees incurred in defending against a claim, the other party (the "Promisee") incurs, resulting from something the Promisor does or fails to do. Another name commonly used for a Hold Harmless Agreement is "Indemnity Agreement", because the Promisor "indemnifies" the Promisee for any liability or claims made against the Promisee."--
I recognize that General Contractors are having us provide these agreements to help lower (or control the increase of) their liability insurance but I guess one of the questions I have is this an issue of shifting the burden or of sharing the burden for liability. Are insurance carriers going to increase the liability fees (or even Workers Comp) for sub-contractors to adjust for this shifting or sharing?
What are the other implications of all this and why is this something that is becoming ever more and more often requested over the past few years? I’m wondering what all you other Builders and General Contractors and Sub-Contractors think and feel about this?
"Do not go where the path may lead, go
instead where there is no path and
leave a trail."-- Ralph Waldo Emerson
I can only speak for myself, but my liability carrier now REQUIRES me to require my subs to list me as an "additional insured." In most cases, this has resulted in little or no premium increase for the subs, just a phone call to their agent and another useless file folder in my business records. And my premiums have increased recently despite a totally clean history.
I started a string about a month ago on the liability issue...with this string it appears that more and more folks are confronting new issues with the underwriters; you might find some of the insights people had on that string enlightening...I sure did.
No I'm not in CA. And take it easy on the caps. it's called shouting. Not good msg board protocol. Like my spelling is good. lol If your contractor says 250k is good and that is all you can afford do 250. But look into upgrading when you have money. Not really that expensive. Take good care of your agent. Don't shop him and drop him.
And your GC will be held liable and his insurance co will come after yours. You are responsible for your actions. You like the house you live in? Be careful out there.