Greetings All,
I am a small general contractor located in NYC / Westchester. We do alteration work, mainly commercial with some residential. Liabilty premiums are $50K per year.
I have been in business for 7 years and have no claims.
The cost is killing me.
What are other GC’s paying?
I could classify myself as a carpentry contractor and pay premiums of 10K per year but I don’t really want to go down that road.
Any suggestions would be greatly appreciated.
BTW I joined our local NAHB chapter they and the NY state builders assoc. are working on a group self insured policy, but that is still in the works with no anticipated start date.
Thanks,
JW
Replies
What's your annual volume?
Annual volume is one million.
Sounds about right for where you are. I am in New York's Essex county, way upstate, and to do light commercial GC work at $1M annual volume, I would project my GL premiums to total $35K to $45K.
There are too many smaller operators here that are doing residential GC work, and cheating (IMHO) by getting a carpentry "artisan" GL policy, for which the premiums are 25 to 33 percent of that for a GC. The "artisan" policies do not include contractual liability. Our local building department doesn't know anything about insurance, and while requiring that permit pullers furnish certs for GL, WC, and disability, will accept any ragtag outfits submittals.
We have permits pulled where the puller is an employee of a concrete sub, and using his employer's certs, with permission. We see them pulled where the contractor has no WC, but the owner has a business with a small payroll, so the owner's WC policy is used.
It is the New York plaintiff lawyers we have to blame, the ones that were behind the New York scaffolding law. Step across the border in any direction, VT, PA, NJ, CN, MA, and those premium costs drop like a stone.
Gene,
Thanks for your reply. I am less than 20 miles from Conneticut. I should look into cost savings if I move my office there.
JW
Correction: Gene mentioned contractual liability. Does your policy include that? Mine does not.
Wow, that's about 5% of gross for insurance premiums. I generally expect 1-2% but I'm classified as residential.
You mention contractual liability, I wonder if that's significant part of the premium. Does it mean that your carrier could be on the hook for consequential damages or other stuff aside from personal injury or property damage? What if you remodel a restaurant and don't finish by the deadline, so they sue you for lost revenue? Is that an exposure for your carrier? It may be useful to have their legal department look over your contract forms and see if they can suggest things that will limit their liability and theirs. My carrier has reviewed my contracts and subcontracts, it's part of the annual renewal.
The insurance company is not liable for costs associated with projects not being completed on time.
In addition I never except a contract with penalty clauses.
"I could classify myself as a carpentry contractor and pay premiums of 10K per year but I don't really want to go down that road."
What is your current classification? Why don't you want to go carpentry contractor?
What is the difference in coverage?
How much coverage ($) do you have?
Hello Bill
My current classification is as a general contractor. Current coverage is one million per occurance two million aggregate.
I don't want to classify the company as a carpentry contractor because that would be fraud and if there was a claim the insurance company would not cover any losses.
I mentioned the carpentry classification because this is what alot of my competitors are doing (see GeneDavis's response).
I guess I am griping about the plight of the small business in New York State but I was hoping for some ideas to lower costs.
Thanks,
JW