I need advise in regards to working a quote for a client that needs workers comp with zero employees. He is a construction contractor. He currently has his policy with Companion and it is an Assigned Risk Workers Comp. I am with Supperior Access and they told me that they do not have a market for this. Am I going to have to turn this potential client away? Thanks
Workers Comp Question
- Thread starter Bradley
- Start date
- 7,790
Depends on your state law. In PA a sole proprietor does not need to carry WC.
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Ask your client if he hires sub-contractors and if so how many at one time will he employ for a job. If your state is like mine, the minimum employees required for WC being 3 or 5...never write enough to ever remember...you can then go back to your insurance company and ask to speak with underwriting to see if that will satisfy their minimum requirement. Also ask your client how his business is set up...if he is incorporated and will hire 3 sub-contractors for a job it may be the loophole you need to write the policy. If he is a sole and does all the work himself you may be SOL but you should then take that ammo back to your client and educate him on the benefits of setting up an S corp (liability protection) and hiring sub-contractors to help expand his own business so he can get better groups rates not only for WC but for other insurance as well...You can also ask your client if he has a copy of his current policy for you to review for your own education and to make your arguement to the underwriter you are trying to write through. Good Luck.
Is he telling you that he needs workers comp or are you telling him? Workers comp in these cases doesn't make a lot of sense, which is why it's hard to find.
As a business owner, his liability insurance, his health plan (check exceptions for on the job related injuries), and a disability plan actually provide better coverage, probably for less money.
Dan
As a business owner, his liability insurance, his health plan (check exceptions for on the job related injuries), and a disability plan actually provide better coverage, probably for less money.
Dan
- 15,041
There is a new law taking effect in Tennessee, effective 1/1/10. It requires all construction contractors to carry WC, even if it is a one man shop. Apparently too many contractors were claiming they had no employees by making everyone an independent contractor. This is the state moving to stop this.
California has similar strange laws with hair dressers and real estate agents. They don't make the 'owner' have workers comp, but they do require that the 'owner' provides it for the 1099 people that work in the place, even though they are contractors, not employees. Basically same problem though, nobody had any coverage because they were contractors.
I guess all these rules make sense to someone. Seems like a fix to a problem, let's do it!!!!
Dan
I guess all these rules make sense to someone. Seems like a fix to a problem, let's do it!!!!
Dan
- Thread starter
- #8
This is he case in my situation. Thanks for all the great input. What are my options in regards to the State Fund in tennessee?
All states have state compensation fund, check this for Tennessee
Welcome - Tennessee Department of Labor and Workforce Development
and call them for appointment.They have no production requirements.
Welcome - Tennessee Department of Labor and Workforce Development
and call them for appointment.They have no production requirements.
He probably has to show proof of Workers comp to a potential client and the only way he can do that with zero employees is to get a policy through the state fund (pool). No standard carrier will write a policy with zero employees where the owner excludes himself. You also need to make him aware of a potentially costly situation. If he uses casual labor throughout the year and it shows up as "contracted payroll or labor" and he can't show proof that the person working for him had their own comp then his comp carrier will charge him for that. I had a guy who swore up and down that it was just him and his brother and I told him if he pays any "labor cost", even if he said it was 1099, and he couldn't show proof of coverage for those people, he was getting charged for it. Yup, you guessed it, he forgot about that and was hit with a $40,000 work comp bill at the end of the year. He tried to ignore it and at a later date went to go get comp again. Yeah right, that worked well for him.
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