workers comp.

marlinspiker

marlinspiker

Participating member
Location
Pennsyltucky
I want to hire some people legitimately instead of using them as subcontractors . My problem is that the workmens comp quote i got was like 16,000 dollars a year! Is this normal? I want to be as legitimate as possible and do the right thing, but how can someone afford to start on the right track with 16,000 dollars in insurance? does anybody know where i can get a more reasonable quote?
 
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My problem is that the workmens comp quote i got was like 16,000 dollars a year!

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It is based off of your gross payroll. So, it is difficult to say if it is fair or not.

When I first started payroll, our workmans comp was at 17% of gross payroll (I thought that was bad). We've gone down to 13%.
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When I first started looking for coverage I checked out the Hartford. They quoted my a minimum premium of something just shy of $10k 13 years ago.

Don't know if that was off the cuff or if they truly had a "min" premium.

At that time everyone I talked with had a min and it was a PITA because my payroll would have been so small.

In fact most of the min premiums made my WC rate above 60%. Even had one that ran over 100%.

The hard part is that without a track record most insurance companies consider you a very high risk and price accordingly.

Jamin offered a bit of an example of that... he started at a higher rate but is now seeing a decrease in that rate.
 
If said this in other threads...but its germaine.

Talk with industrial/temporary labor agencies to see if you can have them 'hire' your employees and have them work for you. I did this for many years and it was a great solution. The agency charged me 30% of wages to cover all worker's comp and payroll taxes. At times the state WC rate was around 20% so I made out really well.

By doing this all I had to do was pay the agency one lump sum. I no longer had to do payroll, then escrow the withholdings and do the federal/state filings. This was just like renting my employees.

This was 100% above board, no weaseling. I had a couple of WC claims that were handled very nicely.

There have been agencies that pull a scam on employers though. What they do is claim to make the payroll tax deductions but they pocket the money. then, when it comes time to reconcile the books the agency is gone and the employer has to pay AGAIN!!! Ouch!

Be sure to talk with your liability insurance agent to make sure that things dovetail with them. It might not hurt to talk with an attorney too.
 
First of all, if your using workers as subs and they have no comp policy you are responsible just as your customer is if in fact there is an injury to any worker, beit sub or legit employee. If this is the case you are doing your customer no favor at all unless you have millions in the bank to cover such expense. My comp costs me between $90,000 and $125,000 a year and I have never run without it. At $16,000 a year lets say you work three days a week thats only about $115 a day so I believe your customer would have no problem at all paying that for complete protection from your employee/subcontractor suing him over an injury that happened on his property. JMO.

I had an employee pinch the end of his finger on the chipper winch, lost a fingernail for a couple months,no broken bones, healed back just fine, cost my comp company $29,000. $16,000 ain't bad.
 
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...I believe your customer would have no problem at all paying that for complete protection from your employee/subcontractor suing him over an injury that happened on his property. JMO.

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Is it Jim or James?
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Anyhow, I agree. When I use my W.C. insurance as a selling point, customers are relieved I carry it. And I print a copy for every customer to have on file.

If an employer evades having W.C. they are evading Uncle Sam too. It's a pattern non-legit companies have.

So, think of investing in W.C. insurance, not only as protecting your employees in the event of an accident, but think of W.C. as an investment to sell jobs.
 
It all depends on the state your in too. I have Farm Family for all my insurance except WC. In Ny they cant do WC for trees. Be sure your WC covers trees and not just landscaping.

As an owner you might be able to exclude yourself. this sometimes lowers the cost quite a bit.
 
Is it Jim or James?

Well....that would depend on what "it" is refering to.


Jim would be the most frequently used but in some settings, court room or IRS office, James would be prefered. To my mom it's Jimmy unless I'm in trouble it's James Brian. To my childhood friends it's Jimmy Jams. lol!

Anyway, I believe in your investment concept as well.


I exclude myself from WC but would not recomend it if you are working on the crew. I did this even when I was climbing everyday and looking back on it I know it would have been a more intelligent decision to be included. My advice would be if you are going to exempt yourself buy a policy to pay the bills if you are out due to an injury and if you have a family, especially a child, buy some life ins.
 
Another point to remember as far as subcontractors. If you have workers comp they should to.
Lets say you pay a sub $2000 included is 3men and equipment for a day. The gross payroll is $480 for the day and WC rate is 30%.If the sub carries WC that would be $144.
If the sub doesnt carry it you could end up paying it on the $2000 which would be $600.

This is the way it works in NY
 
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