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General Liability Insurance And Workers´ Compensation Insurance For Trade Contractors, Home Builders, Remodelers and Light Commercial General Contractors With Savings Up To 38%!

Myth #4: Excluding The Owner From Workers´ Compensation Is A Good Idea

"I´ll carry a Workers´ Compensation policy but I will exclude myself since I am the sole proprietor, partner, or corporate officer and this will result in a big premium savings since I really don´t need the coverage anyway."

It´s true that this can be a big money saver since eliminating the owner´s payroll can result in a significant premium reduction. However, it is a big mistake to think that the benefits of Workers´ Compensation are not needed for the owner. Workers´ Compensation pays for 100% of all medical bills resulting from an on-the-job injury and pays lost wages equal to approximately sixty-six and two-thirds percent of the average weekly wage taken by such owner. In addition, certain lump sum payments are made for disability. How will a small contractor support his wife and family if he has no income due to an on-the-job injury? Could this mean losing his home, boat, children´s education/savings account, etc?

1. He must have Health Insurance that covers on-the-job injuries. Don´t assume that all health insurance covers on-the-job injuries! Make sure that you get this in writing. Also, if the owner is being covered as a spouse under his wife´s group health insurance through her work, it would be extremely rare for such coverage to apply to the husband´s on-the-job injuries.
2. The owner should carry a long-term Disability policy to provide reimbursement for lost wages in the event of an on-the-job injury. Such a policy should cover at least sixty percent of the average weekly wage, and payment should continue until age 65 in the event of disability.
3. The owner should also carry a Life Insurance policy to take the place of the life insurance benefit under Workers´ Compensation insurance. The death benefit should be at least $200,000.

In many cases, the sum of the above three mentioned policies could be less than the cost of the owner being covered under his own Workers´ Compensation policy. However the coverage is usually not as comprehensive as that which is offered by Workers´ Compensation. On the other hand, the other policies will provide benefits in the event that the injury results from an off-the-job incident.