Contractor's Insurance 101

[Affordable Insurance]

Hello, my name is Jason Humphries and I'm a commercial insurance manager specializing in Contractor's Insurance. I've been asked to provide some basic information on Contractor's Insurance and to help provide quotes for the forum's members. Feel free to contact me with any questions, or visit our site at https://www.my-ais.com and submit a quote request form for the type of business you'd like quoted.

The coverage a contractor needs is dependant on the type of work he or she engages in as well as the risks associated and protection desired. The general purpose of contractor insurance is to provide financial backing for a contractor who is liable to a client who hires the contractor to perform a certain job. The most purchased type of contractors insurance is general liability insurance. As with other types of insurance, contractor general liability offers the widest protection and is most useful to a company or individual engaged any many facets of contract work. There are maximum payouts on the insurance, generally $1 million to $2 million for each type of protection. Contractors protected by a good plan are usually secured against reasonable financial loss due to problems linked to the contractors work. The most complete protection can be found from adding some more specific types of coverage to the general liability protection.

Worker’s compensation is a common contractor insurance purchased by many contracting companies for their employees. Workers comp insurance is a compulsory type of coverage. This protection helps the employer cover the financial burden of an employee who is injured on a job. The workers compensation insurance generally offers income, medical and rehabilitation benefits for injured employees involved in work related accidents. Some plans also include a death benefit payable to survivors. Business owners/principles may choose to exclude their payroll (and coverage) in some states, with coverage rated only on employee payroll.

Inland marine insurance is another specialized type of contractor insurance. This contractors insurance protects goods that are in transit over land. Many contractors move materials and goods routinely and this allows them to expect the high costs of those items. Tools, equipment and installation floaters are all considered inland marine insurance and are considered essential types of insurance for contractor.

Disability insurance is another common type of contractors insurance used by contractors and many companies, for that matter. This provides for the income needs of people displaced from work for a period of time due to injury. It is commonly referred to “Accident and Health Protection”. Health and life insurance are other types of coverage purchased by contractors.

Another common type of protection for contractor is surety bonds. A surety bond is a financial instrument not an insurance policy. A Surety Bond is a financial instrument utilized to guarantee performance. A building developer hires a general contractor and the contractor is unable to perform on his obligation to complete a building on time or as agreed, developer may look to sue contractor for not performing as promised. A performance bond provides protection for this type of exposures. License and permit bonds are required by the cities, municipalities or state. It guarantees compliance with the local, state, or federal codes. Another reason for requiring a license bond is to provide protection to the consumers. Along with contractor workers comp insurance, many states require contractors to have contractor license bonds.

Whatever your insurance needs may be, please visit our site at https://www.my-ais.com and submit a quote request form for the type of business you'd like quoted. Use the "Request a quote" link on the left and select the line you'd like us to quote. Typically you'll receive a call from our sales center with quote details and financing options and you can bind over the phone with faxed signatures.

You may also email jason@my-ais.com or call me at 803.798.5754 with any questions, and I'll be adding features/articles that may be helpful to the forum as I can, so check back often for updates.

[Affordable Insurance]

Contractor's Insurance quote request

https://www.my-ais.com/myaisquotes/Contractors_In.html

Worker's Compensation quote request

https://www.my-ais.com/myaisquotes/SC_Workers_Com.html

Commercial Auto quote request

https://www.my-ais.com/myaisquotes/SC_Commercial.html

Please note that we're using our original web portal until the national site is ready to go live, so you'll see SC on every page. We do operate regionally, but that's one of the tricks we use to localize web traffic.

Please provide as much information as possible. If we need anymore information we'll contact you to finalize quote.

Also, we can offer Traditional Insurance programs through respected carriers, but we also offer PEO enrollment with payroll/insurance handled on a monthly reporting basis, helping the client to avoid large down payments and adverse audits. If you have a preference, please indicate. Otherwise, we'll explore all options and help you decide what suits your needs.

[Steve]

Hi Jason,

Thank you for joining up.

You can put your contact information in your signature line of your posts by entering it in your User CP link at top. That's your control panel.

Now I have a bunch of questions on insurance and I hope others will join in as well.

we also offer PEO enrollment with payroll/insurance handled on a monthly reporting basis, helping the client to avoid large down payments and adverse audits
Can you tell me what that is? PEO? How does that help a lawn care business owner?

[Affordable Insurance]

A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. It does this by hiring a client company’s employees, thus becoming their employer of record. It then leases them back under contract to the original employer. This practice is known as co-employment, employee leasing, or staff leasing.

In a co-employment contract, the PEO becomes the employer of record for tax and insurance purposes, filing paperwork under its own identification numbers. The client company continues to direct the employees’ day-to-day activities. PEOs charge a service fee for taking over the human resources and payroll functions of the client company: typically, this is from 3 to 15% of total payroll.[6] This fee is in addition to the normal employee overhead costs, such as the employer's share of Medicare and unemployment insurance withholding. In addition, PEOs benefit from aggregation of employee headcount: by combining the employees from multiple clients, they qualify for lower premiums on health insurance plans.

A PEO generally generates some of its income through various methods of insurance, wage and tax arbitrage. In insurance products, a PEO will purchase workers' compensation, employment practices liability and employee benefits insurance at a given price. The PEO then adds a markup to the premium costs and bills that rate to the client company, which is still less than the company would pay on its own.

The value proposition to client companies is that the use of a PEO saves time and staff that would be used to prepare payroll and administer benefits plans, and may reduce legal liabilities or obligations to employees that it would otherwise have. The client company may also be able to offer a better overall package of benefits, and thus attract more skilled employees. The PEO model is therefore attractive to small and mid-sized businesses and associations, and PEO marketing is typically directed toward this segment.

The PEO, in short, can sometimes offer significant savings on insurance, shift payroll processing burden from employer to PEO, offer pay-as-you-go insurance premiums versus the down-payment and audit method of traditional insurance and provide your employees some stability since they will be re-assigned to another network employer if you need to let them go.

[Steve]

Oh this is fascinating! On average, how many employees would a lawn care business need to take part in such a service?

Also, would the lawn care business still handle all the hiring? Or would this service hire the employees?

[Affordable Insurance]

With most PEO's only one employee is required, and business owner maintains the responsibility of hiring. I've found the Worker's Comp rates to be very competitive, while the General Liability rates seem to slightly less so. Most PEO's can add in any insurance line you can imagine, including health/life insurance.

[Fresh Cut]

Does business insurance cover my vehicle too?

I recently bought a box truck and my current personal insurance company won't insure it because of what kind of vehicle it is (I didn't tell 'em, I just gave 'em the VIN and they somehow knew).

I figured this would be a great time to go ahead and get business insurance and have it cover everything including my truck.

I need info on this ASAP. I can't get my truck registered and get a plate for it until I have it insured, and I can't(not supposed to) drive the truck without a plate on it or without insurance for that matter.

I need to get rollin.

[Steve]

Send Jason a PM or an email and see what he says. Maybe he will get back on here and respond to your post so others can learn from it as well.