In NY state, or anywhere for that matter, can you get a liability policy and workman’s comp. without a formal business set up by using only your SS#. I know of two people who work indepedently and say they’re insured but don’t have a formal business. I’ve never had them do work for me so I’ve never actually asked for cert.’s.
Dustin
Replies
what's a "formal business"?
I have liability ... no workers comp on myself ...
and I'm pretty casual about things.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
A DBA or an Inc.
I'm llc but had the insurance way before that.
don't know anything about dba aside from opening a bank account ... not sure how "official" that makes anything ... but that all said ...
I'm thinking an insurance company will take anyone's check.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I'm thinking an insurance company will take anyone's check.
Yea, its the getting one back thats difficult!
I carry liability and I'm not licences, llc, dba or any of the other things that business' call themselves.
I do side work and want to make sure the HO's property is covered should something happen.
Doug
that's how I worked when I first started.
just me ... my name ... my ssn ... and my liability ins.
there's no state licensing ... so the rest was just fluff.
have registered a biz name ... went llc .... bought more ins ...
but it's still just me!
still have no idea what a "formal company" is?
more debt?
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
One difference, in my mind, between a "formal company" and the alternative is the possession of WC insurance. Yes, that does lead to more debt (more expenses to be precise) but the HO is exposed to any undue liability.We have 95% of our subs covered by their own WC policy and the remainder fall under our umbrella policy. If someone were to take a nosedive off of the second floor I'm confident that we may have a a lot of paperwork but the HO is not going to have to defend themselves in a lawsuit.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Jon
But as a single owner(no employees) does WC do any good?
I thought that you couldnt have WC on yourself. Maybe I'm missing something, or maybe the rules change when you company is something other then a simple llc.
Doug
Doug,I'm pretty sure that varies by state. In VA, you Here in VA, some insurance companies will let you submit a waiver from an uninsured sub at audit time that states that they are a sole prop. and have no employees. I don't know how this affects the audit as our insurance company does not allow this.We do have sole prop. guys who sub to us that do have WC coverage, so it must be possible to get it in VA.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
But as a single owner(no employees) does WC do any good?
I thought that you couldnt have WC on yourself. Maybe I'm missing something, or maybe the rules change when you company is something other then a simple llc.
I used to sub from a company in NY State which required that I have WC on my sole owner, sole employee company. Trouble was, that the only way I could be covered was to incorporate and becoming a wage earner, 1040 and all.
In NY, we have to carry WC to get a check from another contractor or else when they were audited by their comp. company, they were liable to cover the WC on that money. In other words, all labor was required to have coverage and if you wrote the check and couldn't provide a certificate from who you wrote the check to, then you paid comp. on that money. Back in the day, we had a policy that excluded the officers of the company and only paid a minimum premium but there was no actual coverage because the officers of the company were the two idiots (me being one) out there hanging vinyl siding on the building in the rain/snow with no gutters at 33 degrees and we were it. Now I can't be excluded, not sure if it's because I'm an S-corp. or just because the policies don't allow exclusions to officers anymore, I'd rather be covered anyway, even though it hurts my wallet.
That sounds very familiar. I subbed installations from several NY companies which billed me for WC on the total payout, like 10%, until I got them a certificate of insurance.
As absurd as it seemed to me, to have a policy which covered no one, it was a lot cheaper to get the WC certificate than that big chunk that the company was taking off the top.
What I always wondered about that was, had I been injured on their job, wouldn't their WC insurance policy have been the hospital's first recourse for payment? I never asked the company owners about that as it seemed like the answer could only mean more money coming out of my end.
Edited 11/17/2007 11:13 pm by Hudson Valley Carpenter
Every check has to have comp if it's payroll or to another company that you can't justify. Whether it's payroll or not. Say you bought a ladder from an individual person and lost the receipt. Come audit time, you're paying WC on the check for the ladder.
Every check has to have comp if it's payroll or to another company that you can't justify. Whether it's payroll or not. Say you bought a ladder from an individual person and lost the receipt. Come audit time, you're paying WC on the check for the ladder.
It's been years since I've been audited for WC but I never had anyone get that tough with me about expenditures. Maybe times have changed in the insurance industry.
Purchasing WC coverage from New York's State Insurance Fund isn't really different from purchasing it from any other private insurer.
You can opt to exclude up to two principal officers of the company from coverage, but it is an option, just that. You do not have to check the box.
Problem is, when you opt out, i.e., don't take the option, in effect electing to cover yourself, your premiums will go through the roof, and in NY that roof is way up there in the stratosphere to begin with, because of something everyone knows of (trial lawyers) and something else no one outside of NY has ever heard of (the infamous NY Scaffolding Law). On carpentry labor, the cost is around 25 percent of payroll, plus some fixed premium expense above that.
The reason they will go through the roof is because the insurers will figure that you, as the owner, can be on the clock as much as 24/7, and they will figure your rate accordingly. No way around it.
So, covering yourself when a sole prop, in NY, with WC, makes no sense at all.
It also makes no sense when you read into the fine print of a policy and discover that a contractor does not have to pay the WC of an uninsured (WC) sole prop sub provided that the sole prop meets certain test criteria.
I once hired, then fired, a real stooge of a sub (in NY, with me carrying NY WC as a GC) who had an issue with my deducting from his invoices the amount it was costing me in additional WC costs to carry him. It was partly other things too, but my firing of him came when he claimed he could no longer accept the billing knockdowns I was doing. I was, like, hello, a cost is a cost, we're just talking business here. Your competitors that bid this all have WC coverage.
I think that stooge of a sub is a regular lurker here, unless he cannot afford an internet hookup anymore.
Again it seems like some things have changed, clearly for the worse, since I last bought comp insurance in NY State. Thanks for giving me an idea how bad things are now.
Edit: When I was buying comp insurance, there was no option for the sole prop. to include himself. He could only be an employee if he incorporated, then put himself on the payroll.
Edited 11/18/2007 3:26 am by Hudson Valley Carpenter
I'm in NYS. Was a sole proprietor for years and was told I could not get workers comp that actually covered me. I've had my own health insurance as a result for years. This year I had to take on a guy. Looked at all ways of doing it...employee, independent sub, partnership, LLC.Wound up going LLC. He is a junior member of the LLC at x-percent. He files taxes as an individual with a schedule c as do I. My accountant/lawyer who does many of the construction companies around here says no workers comp is needed for either of us, because we are both members/officers of the LLC. Since I've become an LLC, I notice many legal notices in the paper of people going to LLC, including a guy I used to work for who usually has 4-5 guys working for him at any given time. He had been doing them (and me) as independent subs, probably not very defensibly for more than one or two of us. Now he's LLC with multiple "members". My insurance agent corroborated that I do not need WC on either of us.I've spelled out very clearly what it means to my partner that he has no WC coverage and have urged him in the strongest of terms to get health insurance, but he's not done so yet. It's all above board and legal according to my lawyer, and the way everyone is doing it around here, but it makes me nervous. But the alternative is to take him as an employee and have to bill about 30 percent extra for his time, making it tough to stay competitive with others in this area. I'm billing at about the top of the market here already.Steve
Steve, Very interesting to read your post. That's almost exactly what I went through as a sole prop. in NY State. In the end it became clear that forming a limited partnership was the most effective way to stay solvent, competitive and safe.
Edit: It also proved to be the best way to motivate the right kind of employee. No baby sitting or carrot dangling needed when a self starter has a vested interest.
But I had the same concerns as you about individual health insurance for myself and anyone I worked with.
One thing in our favor was that we could evaluate the work we did for risks, before deciding to take it on. We were definitely more safety conscious which probably helped us to avoid any major injuries.
Edited 11/18/2007 3:48 am by Hudson Valley Carpenter
Yes, I find that I work very hard to avoid doing stupid things knowing that it'll come out of no one's pocket (and hide) but my own. 15 years and nothing worse than a couple of slices to that chisel stop that I call my left hand and a broken finger from dopping an 800 lb. piece of bluestone on it. Before I started doing this for a business, I nearly cut my left hand off with a skil saw. Luckily I had health coverage from my desk job. 10K of the inurance company's money later, I still had my hand but not at 100 percent function.My guy is happy to have the status of member. He's been employee of others at lower wages and I think he really is feeling more a part of the process now, plus he gets all the deductions and stuff that filing as a self-employed person allows. I sure do wish he would get himself some health insurance though. About the first week he was working with me he broke through some punky ceiling joists and fell 10 feet onto his back. HE was OK, but it left ME feeling sick to my stomach for days...Steve
Edited 11/18/2007 8:12 am by mmoogie
Sounds like we're also on the same learning curve with chisels. :-) I've got a couple of old scars in the heal of my left hand too.
I can fully appreciate why that ten foot fall made you feel sick but that's what comes after having had a bad one in the past yourself. For a younger guy, surviving something like that, uninjured, is just more proof that he's invincible.
Yeah, right...but how can you argue with him?
Edited 11/18/2007 8:36 am by Hudson Valley Carpenter
Jeff,
The "formal comany" that I was refering to that I obviuosly confused many people with is just that. A recognized DBA, LLC, S-Corp ... I am an S-corp., was originally a DBA. I was simply under the impression that a liability and WC policy for a business, required an actual business with a federal tax ID (1600) number. You can't set up a business checking account or get business credit without out the number, therefore, I didn't think that business policies would be any different.
Dustin
I've had my biz checking account longer than I've had a registered tax id number.
might be my BDA is my last name ... Buck Construction ... don't know?
but like I've been hinting at ...
all the extra paperwork in the world don't make for any more official of a business.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
If you are an SP using your own name you don't need a DBA.You need a DBA only if you are using another name..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
In NY state, or anywhere for that matter, can you get a liability policy and workman's comp. without a formal business set up by using only your SS#?
Yes, in NY State.
In Texas, you can get liability as a sole proprietor and can get workers comp for employees. You cannot get workers comp on yourself.
I am in NY, so I know a little about it.
I have had GC liability and WC as an LLC and as an S-corp, but my insurer says I can get the same coverages as an individual.
Be careful when you hire a contractor in New York. Liability policy costs for contractors are the highest in the country, and so are the WC rates. Be sure to see the details of coverage handled by any policy someone says they have, by reading the fine print on the certificate.
Ask that the insurer issues the cert directly to you. Don't accept one handed you by the contractor.
Show your subs' or contractors' certs to your insurer, and request a review.
To All,
Thanks for the replies, I just didn't think that an individual could get the policies because of the possibilities of future employees and the general uncertainty of who or how many the policy would cover.
Dustin
Insurance companies audit your payroll account to fix the premium. Actually they ask to see all your accounting records. This is at the end of the billing cycle.
So you get the policy and pay the initial premium based on the number of employees you expect to have and the number of hours you expect them to work, during that term of the policy. The audit happens afterwards, to see who owes what to whom.
Edited 11/16/2007 10:49 am by Hudson Valley Carpenter