Contractor Insurance And Risk Management Blog » contractor

Crime Exposure Worries Americans In Bad Economy

admin — Sat, 31 Jan 2009 13:48:56 +0000

Chubb Group of Insurance Companies recently conducted a nationwide survey of 1,000 people and “more than four in 10 Americans are worried that the economic environment can expose their families to crime…”

Here are some of the findings:

41 percent of those who responded to a nationwide survey are anxious about crimes that they and/or their families will be exposed to based on the economy
40 percent are disturbed about domestic contractors’ dependability

As for improvements to the home:

45 percent intend to prolong home improvements such as additions or renovations
25 percent intend to cut back their spending on repairs and maintenance

Source: 2008 Chubb National Home Protection Survey

Surviving Your Insurance Audits – What Contractors Need To Know BEFORE The Auditor Arrives

admin — Fri, 09 Jan 2009 14:23:42 +0000

Insurance Audit – just these simple words can trigger very negative emotions for a contractor! In this blog I will attempt to help prepare you for your next Workers Compensation and/or General Liability audits.

To begin, both of these policies are based on estimated numbers (employee payroll, uninsured sub payroll, amounts paid to insured subs, gross receipts, etc.) since you don’t know exactly what they will be at the end of the policy term. Usually you will be contacted by the auditor 30 to 45 days after the expiration of the policies requesting an appointment to meet with you and review your records.

The insurance auditor will want to review the following:

W-2’s (employee payrolls)
1099’s (subcontractor payrolls)
ledger statements
certificates of insurance on your subcontractors (please make sure that the policy effective and expiration dates on your subcontractor’s certificate are in line with the dates of their service; sometimes you will need to have more than one certificate on your subcontractor).
Job duties of your employees and subcontractors — this is needed to make sure that they are properly classified according to insurance rules and regulations

After the insurance auditor meets with you and reviews the above information, he will go back to his office and “count the beans” to determine whether you overpaid or underpaid your premiums. He will then send his report to the insurance company. Depending on the outcome, you will either receive a return premium or additional premium invoice along with a copy of the audit worksheets. Please be sure that you understand audit additional premiums are due and payable in full within 30 days of the audit, unless it’s being disputed.

Due to confidentiality laws, your insurance agent will not be given a copy of the audit worksheets unless you give your permission during the audit. I strongly recommend you give your permission. If you do dispute your audit you will need your agent’s help during the process. Without the audit worksheets there won’t be much we can do for you.

When the insurance auditor arrives at your office I recommend that you have a comfortable, quiet place for them to work, and have all of your paperwork ready and organized. Make sure that the person who is to meet with the insurance auditor has cleared their calendar so they won’t be interrupted with phone calls, office meetings, etc. Treat the auditor as a respected guest and not as the “enemy” — offer them the same amenities you would offer to any other guest. Remember, they are people too and are there to do their job. I’ve dealt with many insurance auditors, and their main complaints are that when they get to their appointment the records, people, place to work, etc. are not available and the insured was rude. Their negative impressions may not be the “whole story”, but it can make a difference. Believe me when I tell you they don’t want to be in your office any longer than absolutely necessary!

Are All Contractors Required to Carry Workers Compensation?

Admin-SH — Wed, 07 Jan 2009 19:57:14 +0000

I have been in the insurance industry for longer than I care to say, and there are numerous myths that seem to endure over time. In an attempt to put these myths to rest I will be be discussing some of the more “common” ones in a series of blogs.

One of the most common ones regarding Workers‘ Compensation for a General Contractor (builder and remodeler) is: “I’m not required to carry Workers’ Compensation under state law because I don’t have four or more employees”.

The fact is that this is more complicated than it seems at first glance. For purposes of determining the employee count, most state laws also count uncompensated officers as well as employees of sucontractors. In addition, state laws count the total number of employees during an entire year, and not the average number of employees at any given time.

If an employer is required to carry Workers’ Compensation but does not do so, the injured worker can file his Workers’ Compensation claim with the state’s Uninsured Employer’s Fund and will get paid the traditional benefits. The state’s Uninsured Employer’s Fund will then file a lien against the non-complying employer for the amount of the payout and can levy substantial fines against the employer in addition to the benefits.

After I tell my client this, their next response is sometimes “Can’t I file the claim under my General Liability policy?”. The answer to this is very simple – “No”, as these types of claims are excluded.