I am a sole prop. remodeling contractor, working in Pa. I called my insurance agent today to inquire about workmens comp insurance, which I do not have. I was told that if I purchased it, it would be around $2000.00. Here is the kicker, I would not be eligible to collect on it. As a sole prop, you don’t need it, because there are no employees. When doing some jobs, clients ask about workmens comp coverage, or you need it if you sub out to a company. Now that’s a catch 22. What’s a fellow to do? Also, if you are a LLC, you are still not eligible to collect if you are a sole prop. However, if you are incorporated, you can, because you are an employee of the corporation. But that is another topic for discussion. What do you guys do?? Thanks in advance for your input.
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What do I do? I work very carefully. I think one solution is to buy disability insurance. I asked my agent once and he said it would be prohibitively expensive for someone in any construction business. This is a good and important question, and I look forward to any suggestions or experiences.
Al Mollitor,Sharon MA
I have disability insurance for that very reason. It's not THAT pricey, about $200.00/mth--a 1/3 of my health insurance...yeah, imagine spending more on insurance than on a mortgage...something's wrong with this picture.
The disability insurance isn't huge coverage, but if something nasty happens, that and social security disability will be welcome.
Gary
http://www.garymkatz.com
Write to your congressman. That ripoff was no different when I was a sole proprietor in NJ ten years ago, and it's the same in CT now. When I worked in Jersey, the w.c. only cost a couple of hundred, so I just bought it. But two grand for nothing? Scam.
Andy
Arguing with a Breaktimer is like mud-wrestling a pig -- Sooner or later you find out the pig loves it.
Andy, a sole proprieter in Ct. can elect to be covered by the work. comp. statute and get w.c. insurance that covers him. see general statute 31-275(9)(a)(ii). By doing this, you are both an employer and an employee.
Huh -- My insurance agent never mentioned this. Where are you and who do you use?
AndyArguing with a Breaktimer is like mud-wrestling a pig -- Sooner or later you find out the pig loves it.
I'm a lawyer in Hartford and do a fair amount of comp. defense work for the insurance carriers. In fact, I just finished a case where a roofing sub excluded himself from his policy and tried to claim he was an employee of the GC after he fell and broke his wrist badly. One of the exhibits was the application for his policy in which he clearly excluded himself from coverage.
I bet that pretty much clinched your case.Arguing with a Breaktimer is like mud-wrestling a pig -- Sooner or later you find out the pig loves it.
Yeah, I got the decision the other day and the comp. judge rejected the claim. I feel somewhat bad for the guy because he was badly hurt, but my client would have been absolutely killed on his premium audit. Further, my guy offered to hire him as a regular employee, but he wanted no part of reporting to work every day at 6:30 am and he figured he could make more money as a sub...$110 per square.
you think insurance is bad now just wait til a few more baby boomers retire and no one is taking there place to help defer the costs!Steve
S.J.MERRETTE Carpentry & Construction • Robesonia, PA
Nothing is impossible...It just hasn't been done yet.
Tom? Is that a relatively new statute? I'm in business in CT and when I started (granted nearly 20 years ago) I was told I couldn't be covered under WC or UC and had to take out a disability policy on myself...
Paul
I checked the "history" of the statute and it appears that this section was enacted in 1979(Public Act 79-113) and it applies to both sole proprietors and partners in a partnership.
Well, looks like I got some bad advice from my insurance agent. Although the "good" news is that my current agent reviewed my disability policy and said whatever I do, don't let it lapse. Apparently it's muchhhh better than anything I could get now, so good news/bad news I suppose. But there still isn't UC for a small business owner who goes belly up I presume? I always thought that was wrong, personally...
Worker's Comp policies vary from state to state.
I'm in Oregon and don't have clue about PA's. I can, however, cover myself, which I don't do, but if I did, I would track my hours just like my employees (I do track my own hours, though, for several reasons, despite my project contractual arrangements).
The WC I'm familiar with bases premiums on estimated hours per year and on the highest risk rate for residential construction, which in Oregon, is carpentry/framing/roofing, etc.
At the end of the policy year, my time cards are audited and all those jobs we did that were at a lower risk rate (such as tile work, foundations/concrete, drywall, etc.) give me a rebate on the premiums I paid during the year.
But from some past threads here, I'm under the impression that some states, like Florida are either requiring Sole Proprietors to insure themselves, or they are considering it.
BTW a couple of examples in Oregon: For framing WC premiums are a little over $19 per $100 payroll and foundation/concrete work is a little over $6. Stuff like cabinet work or laying tile falls somewhere in between.
A friend of mine is a commercial Diver....his rates are over $150 per $100 payroll. Logging is around $40 per $100.
I just got a quote for a $2m umbrella liability (required to carry a general contractor license here) that has workman comp as a component of the policy, based on the payroll $$'s per year, this is for one employee $27,500 payroll, for $3600. (Combined with my other commercial insurance on rental properties (premium: $3500). The agent I've worked with said I should jump on it, hers would be a good bit higher to renew. The quote is a reputable agency that I've used for maintenance bonds over the past few years.
remodeler
I met with my new insurance company and got a clarifitcation. The $3600 is the general liability only, and the payroll component that I thought was workers comp is not - it is only for the general liability risk portion of having payroll, i.e. things not covered by workers comp.
My worker's comp in Indianapolis for carp is $2/per hundred payroll. I have the option of covering myself or not.
remodeler
$2 per hundred?? Guys there must never get hurt. That's virtually free compared to other states.
That's for sure. Here in CT, it's about $22/$100. Which when you think about it, is the equivelent of four carpenters paying into the system to support one. Something seems terribly out of kilter.
AndyArguing with a Breaktimer is like mud-wrestling a pig -- Sooner or later you find out the pig loves it.
As a sole proprietor, in New York, the state insurance fund will provide you workers comp, but it will be very expensive.
My agent told me it is because they figure a sole prop is always on the clock, and that without supervision to say otherwise, any injury can be claimed to have happened when on the job.
I don't know what happens at the yearly audits, though.
here in california it is also around 19-22 dollars per hundred for W.C. When i have called for quotes they (insurance reps) tell me to say i am doing remodeling and some commercial work for the lowest quotes and to say i never do any roofing.
i do not know if we californicators (california contractors, its a compound word) are allowed insure ourselves. i do not want to, i have medical insurance premiums to worry about.
When I was in your position, I also has disability insurance... You can find a policy for whatever you desire to insure yourself for...
ken in Savannah
I also thought about disability insurance, but I heard it is very expensive. Plus the shorter the waiting period the higher the premium. Also, the rates are determined by you income, or the amount you would need to live on. It just isn't fair.
"I also thought about disability insurance, but I heard it is very expensive. Plus the shorter the waiting period the higher the premium. Also, the rates are determined by you income, or the amount you would need to live on. It just isn't fair."
What is unfair about that?
The larger the amount that they potential have to pay out the more it would cost.
And both the waiting time and the income level affect the amount the potential payout.
Got my comp thru a payroll service for a 50% rate. That includes all payroll taxes, comp, liability and bookeeping. They will provide certificates to whoever you need. I am exempt from comp in FL. but a commercial job requires it.
In Maryland, if you're a one man show, you don't need worker's comp. If you get hurt on a job, you use your major medical insurance.
I have Blue Cross, Blue Shield......$830.00/month family plan. In Maryland it doesn't do any good to shop around because everyone's prices are fixed due to the wisdom of the 'People's Republik of Maryland'.
Health insurance is a rip. Talking to parents of a kid that goes to my son's school....they're on medical assistance (welfare medicine). Husband is under the table contractor and wife doesn't work. Say they don't want jobs 'cause they won't be eligible for insurance......OMFG, does that piss me off. It's people like me paying for people like that. I happened to have to visit the emergency room a couple of weeks ago (first time kidney stones) and it was a room full of people with colds and fevers........yoes without insurance.
Meanwhile, the cost of 'filing' personal property taxes has gone from $100.00 to $300.00, vehicle registration has almost doubled and the fishing licenses have gone up considerably. Good news though, our governor has said there will be 'no new taxes'......he's gonna fee us to death.
Soooooo I raise my rates......
This is crazy!
jocobe
"I happened to have to visit the emergency room a couple of weeks ago (first time kidney stones) and it was a room full of people with colds and fevers........yoes without insurance."
JOCOBE,
Yeah, had the same experience here a few years ago. Had a 6" gash on my head, hand holding my scalp from falling off. All they cared about at the ER was my "paperwork." Kept telling them I had a high deductible plan, and was paying cash anyway, and all I wanted to do was get stitched up, but no way. They took me for $500 for what amounted to 8 minutes of treatment (they used staples BTW), from a late 20's something resident.
Lot's of people with colds and such sitting around in the waiting room watching TV ahead of me. Took 3 hours to get treatment.
I'll never go back to that hospital again....And I called the ER in ADVANCE to ask if there was a wait, and they said not long!
BTW, that was WAUKESHA, MEMORIAL. in Waukesha, WI.
Jon
It felt like I had a knife in my back, it was agonizing. They put me in an examination room and told me it would be an hour 'cause there was five people ahead of me. There was absolutely no reasoning with these people. I started yelling and cussing like a sailor. Finally a nurse came in and gave me a shot of pain killer.
Some our worried about the government running National Health Care........no way it could be worse.
jocobe
Edited 4/29/2004 6:55 am ET by jocobe
Now, I know this discussion, about workers comp and medical insurance has happened here before several times but I can't stay away from it when it turns up.
It's especially relevant to me now as I have been sitting home for the past three weeks with my left foot in a cast. I fell about three feet when a ladder slipped out from under me on a concrete floor and I landed on my left heel, breaking the calcaneous bone, the heel bone. At the same time, I struck my left wrist with the drill battery I had been fetching from the upper level of the job site, causing a radial fracture in the head of the ulna. That means that I can barely grip anything and so have a lot of trouble using crutches.
Anyway, the ambulance came, hauled me off to hospital, various doctors did their thing including x-rays, CT scan, and three casts since the accident occurred.
I had to pay $40 for the last cast because I opted for the light fibreglass cast instead of the free but heavy plaster. Other than that, the total dollar cost to me has been less than $5. That's the co-pay portion of the pain killer prescription under the supplementary medical insurance (and long term disability) coverage which costs $113/month. Now, I'm receiving payments from workers comp which are about 65% of my previous take home pay. Not much, but better than a slap in the face with a cold fish, eh?
Of course I've been paying 8.4% of gross pay in worker comp premiums, a rate I've thought was very high. Only a couple of years ago, it was 6.4%.
I should point out that even if I had no worker comp coverage, the quality and cost to me of the medical treatment I received would have been precisely the same, and it has been excellent.
The difference - you know where I'm going with this, don't you - I live in Canada, and though I'm certain that the USA would be a magnificent country to be rich in, I'm sure glad I live here now. I got hurt on the job - I'm in no danger of losing my house or savings.
Please don't take this as a challenge to a fight. I'm well aware of many virtues of the US and flaws in Canadian society and don't need to have them pointed out. I wanted to show you that there is another way to do things.
Ron
The last political figure I've heard say a dam thing about medical insurance was Hillary Clinton......ten years ago........nothing happened then or since. The health industry is the only industry that hikes their rates 15% to 25% every year and gets away with it......it's a joke.
jocobe
Disability insurance sounds like the right route, or try accidental death & dismemberment and your signed document accepting that as all that would be required as damages, only for instances in your own fault and liability...