# Workers Comp requirement



## bigheaded

How many have it and is there a way around not having it and satisfy the nationals. If you do have it is it expensive,


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## Fantasticfordme

The way around here is have less than four full time employees and getting a waiver from your state. I am in Florida and work solo for the most part so I have an exemption waiver. I do work for one National, but being a crew of one can limit what you can do etc etc and could be a negative in a "Nationals" eyes.


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## madxtreme01

I refuse work for any national that requires that insurance. If my state doesn't require it because I have no employees, then why would I get an insurance that I can't use in the event I get hurt on the job. Waste of time, and any company that I have spoken to that requires it has really low pricing anyway.


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## Wannabe

Guys and gals.... Purchase WC on yourself and be done with it. Don't tell me you can't...it's because you don't want to spend a few of your big earnings to protect yourself in case you get hurt on the job. 

As I've stated many times....if you don't carry WC on yourself I would never sub you any work either. Tomorrow I have 1 3-man demo crew, 2 plumber assistants and a 1 man electrician shop working on my job site and they know "no WC, no CGL means no work"


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## NCnewbie

There are inherent risks in this line of work. Not getting into specifics but regardless of if its workers comp or regular health insurance, you need to make sure you're covered. If you're injured on a job site and file it on your personal health insurance, they may conduct an investigation and look for a 3rd party to hold liable, i.e. The homeowner or the national.


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## RichR

Wannabe said:


> Guys and gals.... Purchase WC on yourself and be done with it. Don't tell me you can't...it's because you don't want to spend a few of your big earnings to protect yourself in case you get hurt on the job.
> 
> As I've stated many times....if you don't carry WC on yourself I would never sub you any work either. Tomorrow I have 1 3-man demo crew, 2 plumber assistants and a 1 man electrician shop working on my job site and they know "no WC, no CGL means no work"


 
In New York State WC does not cover the owner or officers so If your a one man band, getting it serves absolutely no purpose. Now If I hire a one man band that does not have it because it serves him no benefit, I will be paying for it on him come audit time. So yes I tend to only hire guys that have it.


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## PropPresPro

Wannabe said:


> Guys and gals.... Purchase WC on yourself and be done with it. Don't tell me you can't...it's because you don't want to spend a few of your big earnings to protect yourself in case you get hurt on the job.
> 
> As I've stated many times....if you don't carry WC on yourself I would never sub you any work either. Tomorrow I have 1 3-man demo crew, 2 plumber assistants and a 1 man electrician shop working on my job site and they know "no WC, no CGL means no work"


No thank you. 
I have had 2 seperate WC policies over the years, but that was only because I had employees at those times. However, I have been self insured for 20 years now & am still ahead of the WC game. Even after loosing half a finger on the job 15 years ago, and paying for a stitch or 2 over the years. I know quite a few people, 2 of them being my parents, who have been fighting with WC for way too many years to try to get them to provide the coverage they were paid well to provide. Nope, at this point of my carreer, if you tell me you're going to require me to have a WC policy on my sole proprieter self, _you're fired_. 
Then again I do live in one of the last areas of the country where blood sucking lawyers still routinely get chased out of town by juries when they try to frivolously litigate the assignment of liability.


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## Wannabe

PropPresPro,

I agree that WC is a sob to collect (they are sneaky baturds) but you missed the point... WC requirement is NOT about you but the hiring party.


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## Zuse

Wannabe said:


> PropPresPro,
> 
> I agree that WC is a sob to collect (they are sneaky baturds) but you missed the point... WC requirement is NOT about you but the hiring party.


Down in the south WC is nearly impossible to collect or much less pay off a claim.

Ive had quite a few of my guys get hurt on the job, one of my guys that had insurance through his wife company ran a chain saw across his foot. Cut through his boot and deep into his foot, needless to say i paid the bill 16k worth of doc bills. 

Its has always been cheaper to pay the bill than make the guys get the coverage, plus its tax deductible.

Over the years Ive sent close 45k of doc bills, one of my guys cut half his finger off. 

Both guys are still with me and would walk threw fire for me because Ive helped them. 

To force a contractor to get WC with the pay scales of today is pointless, but that just my option. 

If you are just working for yourself its great, but company wise its impossible to collect and you still have to pay out. 

Its more important to me to make friends and be able to count on them when i need them because they can count on me when they need me. Hell i would go broke for anyone of my team. Their is inherit risk in very business, Your more likely to get sued while one of your crew is going to a job and runs into a car while working for you. And work orders are flying through the air.

As a company you have to decide whats important for you and those that come along with you on this wild ride we call P&P.

You will never know how important a network of contractor and friends is until you need them.


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## PropPresPro

Wannabe said:


> PropPresPro,
> 
> I agree that WC is a sob to collect (they are sneaky baturds) but you missed the point... WC requirement is NOT about you but the hiring party.


I'm not so sure I misunderstood. Your post stated that those who are choosing to not acquire a WC policy are doing so because _"you don't want to spend a few of your big earnings *to protect yourself in case you get hurt on the job*."_ I do not need a WC policy to protect myself, I have much better options in place for that very purpose.

True, the _requirement_ to have a WC policy is solely up to the hiring party. But the option to not work for those companies is solely up to me. I have excercised that option every time I have been faced with it in this industry and I'm confident that it hasn't cost my bottom line at all.


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## PropPresPro

Zuse said:


> . . .one of my guys cut half his finger off. . .


See! I knew I wasn't the only idiot out there. :wheelchair:


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## Zuse

PropPresPro said:


> See! I knew I wasn't the only idiot out there. :wheelchair:


Ive been in the biz so long i could go on for days about what my guys have done on jobs. My favorite one tho, is when my close buddy was over seeing a roof job. A basic 2 day job roof job, the day before they ripped the shingles off had tarps on the ground to catch the shingles and nails and it rained.

So this clown in his eagerness to prove himself to the roofers he was the "MAN" put the latter on top of a wet tarp! claimed the latter which when he got to the top slipped out from under him which was on top of a concrete patio. A 225 pound man hits ground! breaks his camera! falls flat on his back! he was so embarrassed he got in the truck and drove home.

The roofing crew call me from site and said Patric just quit!!! Yeah im talking about you Pat. 6 stitches in the head and broke collarbone later. He refused to call me for 2 days, i finally had to drive to house to check on him. 

He is still with me after 7 years and is a member of this site... Luv u Man, sorry i just had to tell that story.:vs_cool:


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## allure9121

Here in New York it is very expensive to carry WC. but if you dont have it you more then likely will not get work. 
I recently was quoted at 26k. Trying telling the nationals that and ask for more money


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## PropPresPro

Zuse said:


> Ive been in the biz so long i could go on for days about what my guys have done on jobs. My favorite one tho, is when my close buddy was over seeing a roof job. A basic 2 day job roof job, the day before they ripped the shingles off had tarps on the ground to catch the shingles and nails and it rained.
> 
> So this clown in his eagerness to prove himself to the roofers he was the "MAN" put the latter on top of a wet tarp! claimed the latter which when he got to the top slipped out from under him which was on top of a concrete patio. A 225 pound man hits ground! breaks his camera! falls flat on his back! he was so embarrassed he got in the truck and drove home.
> 
> The roofing crew call me from site and said Patric just quit!!! Yeah im talking about you Pat. 6 stitches in the head and broke collarbone later. He refused to call me for 2 days, i finally had to drive to house to check on him.
> 
> He is still with me after 7 years and is a member of this site... Luv u Man, sorry i just had to tell that story.:vs_cool:


I swear someday I am going to put together a humorous coffee table book with a chapter or 2 of stories like this, a chapter of real pictures submitted by "professionals" in the field, another with actual responses to advertisements searching for employees/vendors, excusses used, corrospondence from cubical monkeys. . . it's going to be a thick book


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## madxtreme01

Wannabe said:


> Guys and gals.... Purchase WC on yourself and be done with it. Don't tell me you can't...it's because you don't want to spend a few of your big earnings to protect yourself in case you get hurt on the job.
> 
> As I've stated many times....if you don't carry WC on yourself I would never sub you any work either. Tomorrow I have 1 3-man demo crew, 2 plumber assistants and a 1 man electrician shop working on my job site and they know "no WC, no CGL means no work"



In some states, specifically the one where I live, an owner is not eligible to collect on a workers comp policy deeming it useless, so unless you have employees, there is no point in wasting the money to have this coverage just to satisfy a nationals requirement.


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## Zuse

In the south the WC laws that are currently written by lawyers and for lawyers and are flat out corrupt. 

Most company's that im forced to hire run 2 company under different names just to stay out of complaisance. Their legal and do millions in revenue, but it makes it almost impossible to find a one that carries it. 

Those that do carry it work solely for the city or state only, they will not touch a job if the Gov is not involved. Its been like this for years. it be comes a slush fund for the state that gets bailed out year after year.


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## Wannabe

madxtreme01 said:


> In some states, specifically the one where I live, an owner is not eligible to collect on a workers comp policy deeming it useless, so unless you have employees, there is no point in wasting the money to have this coverage just to satisfy a nationals requirement.



I believe your in NJ?
"""""""""""""""""""""""
General Contractors
If you are a general contractor, you are required to carry workers compensation insurance even if all your subcontractors carry workers comp. If their policy cancels, the injured employee, owner / proprietor can seek benefits from you. General Contractors MUST require all subcontractors to carry WC insurance, AND the proprietor MUST elect coverage A general contractor should NEVER accept a certificate of insurance for workers compensation when the owner is excluded. If the owner does any work and becomes injured, he or she can make a claim against the GC’s workers compensation policy. In other words, anyone hiring subcontractors should ALWAYS request workers compensation from all sub contractors, helpers, day laborers, etc. If they do not carry this coverage then you (GC) will be liability for their injuries and payroll. An additional premium will be made upon completion of the mandatory audit.

Sub-Contractors without worker compensation coverage, (or you don’t collect their certificates of insurance), are considered as employees and whatever you paid them will be picked up as payroll. You will be charged for them accordingly. When you hire subcontractors with workers compensation insurance, their certificate of insurance MUST state that they have elected coverage for themselves (for individuals, partnerships, LLC, LLP). If the certificate does not state this, then your workers compensation insurance company may not recognize the insurance coverage and charge you for the payroll of the proprietor, owner, partner, LLC or LLP member. This does not apply if they are a corporation."""""""""""""


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## Wannabe

Not trying to argue with anyone. It your own choice to run the risks. I think it's noble that some of you are self-insuring your contractors and that's all fine. Just hope one of the subs doesn't gets in a wreck or is permanently disabled or worse yet a workplace death. I know everyone in the P&P business is rich and all the money your making you can't spend fast enough but I'm telling ya a good atty and an injured sub can wreak havoc. 

Just sayin....


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## Zuse

Wannabe said:


> Not trying to argue with anyone. It your own choice to run the risks. I think it's noble that some of you are self-insuring your contractors and that's all fine. Just hope one of the subs doesn't gets in a wreck or is permanently disabled or worse yet a workplace death. I know everyone in the P&P business is rich and all the money your making you can't spend fast enough but I'm telling ya a good atty and an injured sub can wreak havoc.
> 
> Just sayin....


Im sure that was directed at me in a kind way i might add, and we have discussed this before im sure over the years. And i do agree with you, but its a inherit risk we all take on a daily basis. Its unavoidable even the best coverage can still wreak havoc in any business, the manager in the dollar store which is a friend fell on the job and disabled her for life. because of a a/c leaking from the ceiling. And they had all the required coverage needed to protect her. and the lawyers are still arguing over it. Now the company that installed the a/c is getting involved, its just a mess.

Even i have to keep a lawyer on-call at a monthly fee and she ain't cheap. 
But you know how this game works, you yourself have been their and done that.

Most company's only float enough money to operate the business only. just because of this reason. Risk. they know they could be sued at any time and forced into bankruptcy. Its unavoidable even the nationals know this.

But at the same time we create layers of protection that's built into the system, that's what a LLC is for. Its not like i wasn't advised to not help my subs, hell i was advised to help my subs. It was cost prohibitive, but it was the right thing to do which in turned paid off in the end.

We all know how this game works and i hope many here take your advise, expect to be sued at anytime. I know some that have been down this road and shut down their business threw Bankruptcy and turn around and opened another one and go back to work for the same clients with the clients blessing. Just to keep the work flowing and getting things done. Its crazy, but its the truth. 

Fact is, at this point i really don't have to do this type of work at all, hell Ive spent more time helping other than Ive spent helping myself. And Ive been very successful at it to be truthful. Somethings never change, like taking others with you on a successful path instead of in-riching yourself only. Everyone of my guys works for other company's they start with me and move into a self sufficient Independence. I incur-age it to be honest, most do to the fact of the uncertainty of this type of work.

You never know when or how the rug could be pulled from under you. This is a crazy business with lots of unknowns, prepare and plan for it.

Im not the only one that's become successful at this, most have just don't come to boards like this to spell it out. I'm hear because i enjoy helping and want to see people succeeded. If i can help in some small way then great.

But there is always 2 point of view and both needs to be heard.


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## RichR

Wannabe said:


> Not trying to argue with anyone. It your own choice to run the risks. I think it's noble that some of you are self-insuring your contractors and that's all fine. Just hope one of the subs doesn't gets in a wreck or is permanently disabled or worse yet a workplace death. I know everyone in the P&P business is rich and all the money your making you can't spend fast enough but I'm telling ya a good atty and an injured sub can wreak havoc.
> 
> Just sayin....


I maybe able to share a bad story in a couple years when things shake out and all I can say is I'm thankful for having comp in place as all of the members here should as well. Death in this industry does happen and when it does your world gets turned upside down. :vs_frown:


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## GTX63

PropPresPro said:


> I swear someday I am going to put together a humorous coffee table book with a chapter or 2 of stories like this, a chapter of real pictures submitted by "professionals" in the field, another with actual responses to advertisements searching for employees/vendors, excusses used, corrospondence from cubical monkeys. . . it's going to be a thick book


Workman's comp....yeah.

Roofers are a special bunch. I had a crew years ago that would've made Charlie Sheen look the other way. Doing a 4/12 sheet and shingle on an apartment building, their new guy showed up 90 minutes late and hungover.
He climbs up the ladder and onto the roof and lights a smoke. One guy just walks over and pushes him off the side. It was 18' down. Three quarters of the building was surrounded by thick evergreens and they knew it. Knocked the wind out of him and probably gave him a concussion. First thing he said was "Effers! You guys owe me a cigarette!" Calls me and says he isn't going back up until he finds what they did to his safety rope. The second ( and last) job I got calls from the local PD that they were getting reports about the guys jumping from a roof into the dumpster full of shingles and a 911 had been phoned in once so far.
I saw the foreman a few months ago in Home Depot yelling in his phone at a customer who had stopped payment on a check. I'm betting the homeowner had his reasons....


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## madxtreme01

I'm not disagreeing that workers comp has it's places, but for the most part I am a 1 man show, I only bring helpers when needed, and rarely sub work out. So for me personally to carry the coverage is useless since I can't benefit from it, and my insurance premium would be through the roof because it's based on salary. I have an LLC, so whatever profit the company has is my salary, it doesn't matter if I reinvest that money into other things. Revenue - expenses = profit


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## Zuse

madxtreme01 said:


> I'm not disagreeing that workers comp has it's places, but for the most part I am a 1 man show, I only bring helpers when needed, and rarely sub work out. So for me personally to carry the coverage is useless since I can't benefit from it, and my insurance premium would be through the roof because it's based on salary. I have an LLC, so whatever profit the company has is my salary, it doesn't matter if I reinvest that money into other things. Revenue - expenses = profit


Basically i run mine the same way even tho i sub work out its a very small operation. The problem i run into is when things get out of control, mostly do to the fact that work just all of a sudden overflows like right now.

This is the largest draw back when you cover a whole state, areas will just pop up with a tremendous amount of work and other areas will go dry. When it gets like this i have to go out the door to cover for the the other subs. Which im not to keen on, it forces me into a spot i don't like to be.

Like not being able to pick and chose the jobs that best fit my company's needs that i like to do myself. Nothing constant about this type of work, this is what drew me into into in first place the "rush" 

The contacts and networks Ive made over the years has really paid off. Ive come to the point were i almost forced to bring someone else in and partner up or just run it . Which after last few days or weeks i should say im really left with no other choice. 

Share holder distribution has become a powerful tool. The Form K-1 

At some point you learn things that change your life forever.


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## RichR

madxtreme01 said:


> I'm not disagreeing that workers comp has it's places, but for the most part I am a 1 man show, I only bring helpers when needed, and rarely sub work out. So for me personally to carry the coverage is useless since I can't benefit from it, and my insurance premium would be through the roof because it's based on salary. I have an LLC, so whatever profit the company has is my salary, it doesn't matter if I reinvest that money into other things. Revenue - expenses = profit


A) You may find as I did in NY that you can exempt the owners/officers salary from the comp policy essentially lowering the premium considerably. Why not as we can't as owners/officers collect if injured anyways.

B) What do you do when you bring a "Helper" in for that job you needed an extra hand for gets injured or god forbid worse? Believe me, I thought that way up until recently when I was made aware that serious accidents can and do happen.

Insurance is part of the cost of doing business!


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## Wannabe

Another thing to always take into mind is this: go to a GOOD Contract Atty and have the most ironclad contract for "helpers" or subs that you can. Keep in mind contracts don't stop a WC or Liability lawsuit but it does provide a basis for a defense. 

As some old timers remember we had a sub supposedly lose a part of load off trailer and caused a fatality and 3 serious injuries. Absolutely the most horrible accident. No intent but sub spent 5 yrs in pokie. The lawsuits touched EVERYONE. 

YOU run a business first and foremost and since you are a business owner you are rich don't you know? &#55357;&#56865;


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## madxtreme01

RichR said:


> A) You may find as I did in NY that you can exempt the owners/officers salary from the comp policy essentially lowering the premium considerably. Why not as we can't as owners/officers collect if injured anyways.
> 
> B) What do you do when you bring a "Helper" in for that job you needed an extra hand for gets injured or god forbid worse? Believe me, I thought that way up until recently when I was made aware that serious accidents can and do happen.
> 
> Insurance is part of the cost of doing business!



Like I said I rarely sub anything out, and only on larger jobs do I bring a helper, but at the same time my problem isn't obtaining coverage, my problem is being responsible for what my subs/helpers don't carry on their own. I run an inspection business as well and most of the people that I sub to are 1 man shows where they are not required to carry the insurance, so if I have a policy with just the minimums and no specific person named for coverage, during audit time, I will be paying for the coverage for everyone I have subbed work to including that 1 man operation that doesn't want/can't collect for the coverage. I sub out about 100k worth of work every year, and it is all for either inspections or grass cuts. I have 2 grass cut subs that work alone, and 3 inspectors that also work alone, so they don't qualify to cover themselves in the event of an accident, but when audit time comes, I'm responsible for covering them although they are not my employees. The system is broken.

Also if I hired ABC contracting and he gave me a valid insurance cert and he stopped paying throughout the year, I would be responsible to cover the remainder of what he didn't pay for. It happened to me once. I had the coverage when I opened by biz, I had the coverage for 3-4 months and paid over $1000 in premium payments. I then cancelled the policy since I had no employees and was unaware that owners were excluded. During audit time I was responsible to pay another $500 because my sub didn't have adequate coverage for which that sub made less than $10k during that time frame.


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## bigdaddy

Wannabe said:


> Guys and gals.... Purchase WC on yourself and be done with it. Don't tell me you can't...it's because you don't want to spend a few of your big earnings to protect yourself in case you get hurt on the job.
> 
> As I've stated many times....if you don't carry WC on yourself I would never sub you any work either. Tomorrow I have 1 3-man demo crew, 2 plumber assistants and a 1 man electrician shop working on my job site and they know "no WC, no CGL means no work"


I don't carry WC and I don't require any of my subs without employees to carry it either. Why do you care?? As long as they have GL insurance they are good to go. At the end of the year my insurance company does an audit and as long as all of my subs are exempt too there are no issues. Unless your state SPECIFICALLY says that any sub must carry WC, then you are just as bad as the nationals and regionals making people pay for more sh*t then they actually need.


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## Wannabe

I mush value my assets more than you do  it's all about choice


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## JoeInPI

Simple for us- any and all "help" we use is obtained through a local temp agency who provides the Workers Comp coverage for those people. Then I don't have to pay an annual policy for WC, I satisfy all coverage requirements, and I can get help if needed in a very fast and efficient manner. Works for my setup at least...


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## bigdaddy

Wannabe said:


> I mush value my assets more than you do  it's all about choice


Come on, why do people always say such silly things around here???
What possible ASSET are you protecting with WC insurance?? (My post was STRICTLY talking about WC insurance, NOTHING else)

Simply put, WC insurance is for WORKERS, not company OWNERS.

Your state may be different but where I live, I am exempt if I don't have employees. I can and do use sub contractors who either have their own coverage of if they don't have employees they are exempt as well.


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## madxtreme01

bigdaddy said:


> Come on, why do people always say such silly things around here???
> What possible ASSET are you protecting with WC insurance?? (My post was STRICTLY talking about WC insurance, NOTHING else)
> 
> Simply put, WC insurance is for WORKERS, not company OWNERS.
> 
> Your state may be different but where I live, I am exempt if I don't have employees. I can and do use sub contractors who either have their own coverage of if they don't have employees they are exempt as well.



Couldn't agree more, apparently either the laws are different in these peoples states, or they really think that if a sub hurts themselves on a job they can come after you for wc benefits. It doesn't really work that way.


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## safeguard dropout

bigdaddy said:


> Come on, why do people always say such silly things around here???
> What possible ASSET are you protecting with WC insurance?


Leave ET out of ASSet and the answer is...YOUR OWN.


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## safeguard dropout

madxtreme01 said:


> .......or they really think that if a sub hurts themselves on a job they can come after you for wc benefits. It doesn't really work that way.



Sit down with an insurance agent (not your agent so you know they're not just trying to sell you something you don't need) some time over a cold adult beverage and let them tell stories of cases and who had to pay. You'll be amazed at who had to pay for stupidity.


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## Wannabe

Safeguard YOU are exactly right. I'm one course away from my CPCU designation in Insurance (been tough getting this) and it's utterly amazing the stupid case law with work comp. it's the only product that benefits are paid without considering negligence or fault. I HATE paying for it like anyone else. 

It really is choice... You either opt in or out of coverage.


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## bigdaddy

Wannabe said:


> Safeguard YOU are exactly right. I'm one course away from my CPCU designation in Insurance (been tough getting this) and it's utterly amazing the stupid case law with work comp. it's the only product that benefits are paid without considering negligence or fault. I HATE paying for it like anyone else.
> 
> It really is choice... You either opt in or out of coverage.


Maybe if you hire some illegal helper or have an employee that gets hurt.
If I SUB a job to someone who is EXEMPT they sign an have notarized an affidavit saying they themselves are exempt and don't have employees or wont' sub to anyone else. If they hire someone illegally and that person gets hurt the sub will be on the hook, NOT ME!

I covered my ass by making sure I LEGALLY followed the law. The SUB would be the one that lied in that situation.


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## madxtreme01

safeguard dropout said:


> Sit down with an insurance agent (not your agent so you know they're not just trying to sell you something you don't need) some time over a cold adult beverage and let them tell stories of cases and who had to pay. You'll be amazed at who had to pay for stupidity.



An insurance agent wouldn't help in that situation. You can't have an insurance agent for WC, at least not in NJ, there are only 4 companies that write the policy and you must deal with them directly.


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## safeguard dropout

madxtreme01 said:


> An insurance agent wouldn't help in that situation. You can't have an insurance agent for WC, at least not in NJ, there are only 4 companies that write the policy and you must deal with them directly.


...BS


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## madxtreme01

safeguard dropout said:


> ...BS



well I guess things changed, I haven't tried since 2010


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## G 3

madxtreme01 said:


> well I guess things changed, I haven't tried since 2010


By making statements on a board like this, one should really make sure that they have their facts in order, and not rely on information from 6 years ago. I assume that you educate yourself on P&P rules and regulations, why not this?


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## madxtreme01

G 3 said:


> By making statements on a board like this, one should really make sure that they have their facts in order, and not rely on information from 6 years ago. I assume that you educate yourself on P&P rules and regulations, why not this?



Workers comp laws haven't changed in 6 years, why would this? seems like it would go hand in hand. Also at the same time, who to get the insurance from isn't really that important. The important part is to make sure you are protected and following the law. In NJ the law is you need workers comp to cover your employees, if you have none, then workers comp isn't required. As a business owner, an owners policy is useless because you can't collect if you get hurt, so owners are usually excluded from coverage. If you have subs, just make sure they have workers comp for their employees, and everything else doesn't really concern me with this topic.


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## Wannabe

Proprietors and Partners
These entities do not receive payroll per se. At the end of the year, the profit becomes payroll. As a result, the owner must opt in to the workers' compensation coverage at the time of inception. In addition, many companies do not hire uninsured subcontractors or workers. When the owner has opted out, many companies will not hire that company because the hiring company becomes liable for any injuries on their sites

Proprietors must opt in for coverage.

Employees and Independent Contractors
The owner directly controls an employee in matters of time and duties, and has authority over and responsibility for behavior. An independent contractor self-directs activities, could make a profit or a loss and the employment relationship is not permanent. Both, however, qualify for workers' compensation insurance under the entity's policy. The company, partnership or proprietor must demand proof of the contractor's insurance or the contractor gains coverage under the employer's policy.

Subcontractors can poach coverage from the prime.


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## safeguard dropout

Wannabe said:


> .....the hiring company becomes liable for any injuries on their sites.



I appreciate your expertise on this....although I feel like I'm in classroom and want to poke my eyeballs out. :vs_smile:

I think the above quote is the meat of liability issues, but how many and what layers have liability.

Example;

Safeguard Dropout lands big building contract and he hires

Brads Construction for all phases of the project and he hires G-3 (as a sub) to do the roof.

G-3 drinks one too many during lunch and falls off the roof and breaks a leg. (so sorry dude)

We find out that G-3 didn't have WC and Brad never requested it.

Who is liable? Who is the "hiring company"?


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## Wannabe

Since work comp does not consider fault or negligence liability can flow up to the original hiring party. 

I used to insure a family that needed a new roof from hail damage. We informed homeowner to have whatever company they hire to provide copies of their General Liability and Copy of their work Comp. They received estimates from several reputable companies all between 14-15,000. Along comes a local contractor that only had Gen Liability and quoted around $10,000. Guess who they hired?

Roofing Company then subbed to another company who did the actual ripoff/replace. On day 2 while install on ladder jack broke and guy fell off 2nd story, hit the open porch roof then down to the concrete drive. He lived but was severally busted up. Got life-flight ride to major hospital. Hospital has to report workplace injuries to Dept of Labor thus State Work Comp division. 

Work Comp collected not from the installer company and not from the Roofing Company (even though they got sued from injured party) but from the HOMEOWNER. You see the homeowner became the General Contractor and became the hiring party. 

I urge everyone to read your Insurance Policies and research. Get correct information. 

Big Trucker, I have never hired an illegal  Albeit when it does come to a claim I have been told they disappear


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## Wannabe

safeguard dropout said:


> I appreciate your expertise on this....although I feel like I'm in classroom and want to poke my eyeballs out. :vs_smile:
> 
> I think the above quote is the meat of liability issues, but how many and what layers have liability.
> 
> Example;
> 
> Safeguard Dropout lands big building contract and he hires
> 
> Brads Construction for all phases of the project and he hires G-3 (as a sub) to do the roof.
> 
> G-3 drinks one too many during lunch and falls off the roof and breaks a leg. (so sorry dude)
> 
> We find out that G-3 didn't have WC and Brad never requested it.
> 
> Who is liable? Who is the "hiring company"?


Simple answer is Brad if he has work comp and if not then you.


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## G 3

safeguard dropout said:


> G-3 drinks one too many during lunch and falls off the roof and breaks a leg. (so sorry dude)


I know better than to drink before noon... :biggrin:


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## G 3

madxtreme01 You TOTALLY missed my issue with your statement, and your answer contradicts yourself. I could go on for two pages on your last statement and how you change your story more than Marc Rubio, but I'll stick to those that pertain to my last statement.



madxtreme01 said:


> well I guess things changed, I haven't tried since 2010


This statement tells me that you haven't checked WC laws in your state since 2010. In and of itself, I could really care less how often you check. It's your business, and you run it as you see fit. Nobody but yourself should dictate that, even the law (Criminals don't pay attention to them either...) BUT, it correlates to your next statement...



madxtreme01 said:


> Workers comp laws haven't changed in 6 years, why would this?... Also at the same time, who to get the insurance from isn't really that important. The important part is to make sure you are protected and following the law.


You haven't checked the WC laws in your state for over 5 years, then wonder how anything would relate to this? If you KNOW the laws haven't changed (Which you obviously don't because you haven't checked things in OVER 5 YEARS), how can you safely make a statement like this? How can you safely say that you are following the law, knowing you haven't been following and keeping updated of the ever-so-changing laws?

I'm gonna stop here, because anything else could get me banned by the Mods. Think before you post, and keep your stories straight.


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## safeguard dropout

Wannabe said:


> Simple answer is Brad if he has work comp and if not then you.


OK, so that was a setup to the next question.

Fannie hires Safeguard, (not me :vs_smile

Safeguard hires G-3

G-3 can't work cause he was drinking before noon and busted his leg so he hires me.

I cut off my foot in the mower.

Who is liable? First person up the chain with WC?

If no one has it can I sue Fannie because they were the original "hiring party"?


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## Wannabe

Yes BUT you see the reason why these Nationals are requiring WC. 

I can tell you from first hand experience that EVEN if you have work comp and if the claim is severe (such as a fatality) the claim can work its way up to the National. Had it happen when a claim "passed through" the sub, the GC then up to the National. All 3 paid. Had to dissolve a company. Another reason for a LLC or Inc. 

It's IMPOSSIBLE to dot all your I's and cross all your T's even with a $600/hr atty. My claim could have been so so much worse but my subs were gold. Many on this forum know the particulars but I would never post on public.


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## safeguard dropout

Wannabe said:


> Yes BUT you see the reason why these Nationals are requiring WC.


Seems pretty clear. That's kinda what I was steering at in the first place. If I'm a national I'm requiring WC and I don't care about your state waiver for no employees. How often does a one man show (like myself) hire a buddy for an afternoon? Not very often. How often does a pipe bomb with a wet fuse explode? Not very often.....so go ahead, light it up and hang on. It probably won't ignite.....


----------



## madxtreme01

I'm done trying to argue with those on here that think they have a law degree, here is the law in NJ which might differ slightly in other states. It clearly states that you need coverage to cover employees, not the members of the corporation. Therefore if you have no employees, how do you obtain coverage on employees that don't exist. 

The following employing entities must have workers’ compensation 
insurance in effect:
Corporations –
All
corporations
operating
in
New
Jersey
must
maintain
workers’
compensation
insurance
or
be
approved
for
self-insurance
so
long
as
any
one
or
more
individuals,
including 
corporate officers
, 
perform
services
for
the
corporation
for
prior,
current
or
anticipated
financial
consideration.*
Partnerships/LLCs – 
All
partnerships
and
limited
liability
companies
(LLCs)
operating
in
New
Jersey
must
maintain
workers’
compensation
insurance
or
be
approved
for
self-
insurance
so
long
as
any
one
or
more
individuals,
excluding 
partners or members of the LLC, 
perform
services
for
the
partnership
or
LLC
for
prior,
current
or
anticipated
financial
consideration.*
Sole Proprietorship – 
All
sole
proprietorships
operating
in
New
Jersey
must
maintain
workers’
compensation
insurance
or
be
approved
for
self-insurance
so
long
as
any
one
or
more
individuals,
excluding the principal owner,
performs
services
for
the
business
for
prior,
current
or
anticipated
financial
consideration.*
*Financial
consideration
means
any
remuneration
for
services
and
includes
cash
or
other
remuneration
in
lieu
of
cash
such
as
products,
services,
shares
of
or
options
to
buy
corporate
stock,
meals
or
lodging,
etc.


----------



## madxtreme01

I'm done trying to argue with those on here that think they have a law degree, here is the law in NJ which might differ slightly in other states. It clearly states that you need coverage to cover employees, not the members of the corporation. Therefore if you have no employees, how do you obtain coverage on employees that don't exist. 

*Who Must Insure?*

*The following employing entities must have workers' compensation insurance in effect:

Corporations* – All corporations operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *including corporate officers*, perform services for the corporation for prior, current or anticipated financial consideration *. 

*Partnerships/LLC's* – All partnerships and limited liability companies (LLC's) operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *excluding partners or members of the LLC*, perform services for the partnership or LLC, for prior, current or anticipated financial consideration*.

*Sole Proprietorship* – All sole proprietorships operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *excluding the principal owner,* performs services for the business for prior, current or anticipated financial consideration*.

_* Financial consideration means any remuneration for services and includes cash or other remuneration in lieu of cash such as products, services, shares of or options to buy corporate stock, meals or lodging, etc._ 
​


----------



## madxtreme01

I'm done trying to argue with those on here that think they have a law degree, here is the law in NJ which might differ slightly in other states. It clearly states that you need coverage to cover employees, not the members of the LLC, which I think applies to most here. Therefore if you have no employees, how do you obtain coverage on employees that don't exist. 

*Who Must Insure?*

*The following employing entities must have workers' compensation insurance in effect:

Corporations* – All corporations operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *including corporate officers*, perform services for the corporation for prior, current or anticipated financial consideration *. 

*Partnerships/LLC's* – All partnerships and limited liability companies (LLC's) operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *excluding partners or members of the LLC*, perform services for the partnership or LLC, for prior, current or anticipated financial consideration*.

*Sole Proprietorship* – All sole proprietorships operating in New Jersey must maintain workers' compensation insurance or be approved for self-insurance so long as any one or more individuals, *excluding the principal owner,* performs services for the business for prior, current or anticipated financial consideration*.

_* Financial consideration means any remuneration for services and includes cash or other remuneration in lieu of cash such as products, services, shares of or options to buy corporate stock, meals or lodging, etc._ 
​


----------



## Wannabe

MadExtreme,

Your simple answer: you opt in or you opt out. 

The law applies when you have employees otherwise it is choice. It does not say you cannot have coverage. 

I'm hosting a seminar in Missouri in March that I'm seriously thinking about recording and posting to our website. I hear these questions all the time. It doesn't necessarily concentrate on WC but on claims but invariably I always field 3-4 WC questions


----------



## madxtreme01

Wannabe said:


> MadExtreme,
> 
> Your simple answer: you opt in or you opt out.
> 
> The law applies when you have employees otherwise it is choice. It does not say you cannot have coverage.
> 
> I'm hosting a seminar in Missouri in March that I'm seriously thinking about recording and posting to our website. I hear these questions all the time. It doesn't necessarily concentrate on WC but on claims but invariably I always field 3-4 WC questions


Well I have been told by insurance agent friends of mine that since I'm an officer of the biz and not an employee that in the event of an accident, I can't collect. So lets say I can collect, why would I purchase coverage I do not want/need. I have health insurance, that's all I'm concerned about. As long as I can heal. Yes, I know who's going to pay my bills if I can't go to work. Well the honest truth is that if I can't go to work or find someone to do the work for me, I don't have a business because you know damn well all of the nationals that we all deal with will tell me to figure it out and if I can't perform my scorecard will be effected and blah, blah, blah, so either way it's useless


----------



## Wannabe

Lol I understand how these Nationals work but I implore you to read your health Unsurance policy and see if the is "24 hour a day coverage". Meaning will they cover you if they "know" you got hurt on a worksite. Before the ACA there was some carriers who offered coverage but with the advent of Obamacare choices have been taken away. 

Like a previous post had said abt losing a finger...if you rush to the hospital and said you did the dirty deed at home nobody will question it right? BUT if you have a serious mishap and it's found out or reported that it happened at work then all bets are off. 

For giggles look at all the Insurance jobs out there.... Besides looking for agents the leading classification is SIU (Special Investigations Unit).


----------



## BRADSConst

Wannabe said:


> Simple answer is Brad if he has work comp and if not then you.


Hey! No picking on me. I'm sitting in AMRT class this week so I gotta pay attention and not screw around here.

But back to your point, Brad has work comp but G3, won't be on my job unless his insurance is sent directly to me and it better be "complete"....


----------



## safeguard dropout

[ QUOTE=madxtreme01;126417]Well I have been told by insurance agent friends of mine that since I'm an officer of the biz and not an employee that in the event of an accident, I can't collect. So lets say I can collect, why would I purchase coverage I do not want/need. I have health insurance, that's all I'm concerned about. As long as I can heal. Yes, I know who's going to pay my bills if I can't go to work. Well the honest truth is that if I can't go to work or find someone to do the work for me, I don't have a business because you know damn well all of the nationals that we all deal with will tell me to figure it out and if I can't perform my scorecard will be effected and blah, blah, blah, so either way it's useless[/QUOTE]

Wannabe, please correct me if I'm wrong, but it isn't so much about if you can collect, it's about protecting yourself from a lawsuit. I believe in the event of an injury, your definition of employment and the courts definition of employment would be quite different.

I was told that once your guy gets in your truck, uses your screwdriver, or climbs your ladder, that is classified as employment and not contracting.

I also live in a state where I cannot collect on my workmans comp policy. I have a separate personal disability policy to cover me for the day I cut my foot or finger off. Not cheap either.


----------



## BRADSConst

Wannabe said:


> Lol I understand how these Nationals work but I implore you to read your health Unsurance policy and see if the is "24 hour a day coverage". Meaning will they cover you if they "know" you got hurt on a worksite. Before the ACA there was some carriers who offered coverage but with the advent of Obamacare choices have been taken away.
> 
> Like a previous post had said abt losing a finger...if you rush to the hospital and said you did the dirty deed at home nobody will question it right? BUT if you have a serious mishap and it's found out or reported that it happened at work then all bets are off.
> 
> For giggles look at all the Insurance jobs out there.... Besides looking for agents the leading classification is SIU (Special Investigations Unit).


 I just dealt with this a few weeks back, well kind of.

My kid was home over Christmas. He's also an employee. On or about a Thursday, he starts complaining his eye hurts. Get to Saturday morning, It's pretty red so I take him to ER, about two blocks from where I'm working (I'm in a lettered truck and wearing lettered clothes). I take him in, and get him registered and then leave as his mom's a nurse at that hospital and was coming down to check on him.

Holy hell, everyone in the hospital is trying to get him to fill out a WC incident report. I have no idea when or if it happened on the job. He doesn't either but was wearing safety glasses all week. Dr. can't find anything in his eye by Saturday except a scratched cornea. Fast forward a week and my wife gets call by her insurance carrier and goes through the wringer. They were demanding it happened on the job, were going to refuse the claim and go after my work comp. I'm still not sure where this stands. What I do know is none of us know what got in his eye or when it happened....


----------



## BRADSConst

safeguard dropout said:


> [ QUOTE=madxtreme01;126417]Well I have been told by insurance agent friends of mine that since I'm an officer of the biz and not an employee that in the event of an accident, I can't collect. So lets say I can collect, why would I purchase coverage I do not want/need. I have health insurance, that's all I'm concerned about. As long as I can heal. Yes, I know who's going to pay my bills if I can't go to work. Well the honest truth is that if I can't go to work or find someone to do the work for me, I don't have a business because you know damn well all of the nationals that we all deal with will tell me to figure it out and if I can't perform my scorecard will be effected and blah, blah, blah, so either way it's useless





safeguard dropout said:


> Wannabe, please correct me if I'm wrong, but it isn't so much about if you can collect, it's about protecting yourself from a lawsuit. I believe in the event of an injury, your definition of employment and the courts definition of employment would be quite different.
> 
> I was told that once your guy gets in your truck, uses your screwdriver, or climbs your ladder, that is classified as employment and not contracting.
> 
> I also live in a state where I cannot collect on my workmans comp policy. I have a separate personal disability policy to cover me for the day I cut my foot or finger off. Not cheap either.


The WC may not cover you. What it does, is cover the person you are working for. Madxtreme keeps saying "I don't need it cause I can't collect". Wannabe is saying "if you work for me, you will have it because you aren't collecting on mine".


----------



## madxtreme01

Yes, the courts definition of an employee and a contract is 2 different things. It is spelled out clearly on the states wc info page. However you assign job abc123 to contractor xyz who is a single member LLC and does not have any employees. He gets hurt on the job using his own equipment, has no help with him, and goes to the er, dr, hospital whatever, he is not considered an employee and can't go after my company just because I give him order abc123. He does not fall into the category of an employee according to the state. However if I drop him off with my equipment in my truck and tell him I'll pick him back up, we have a different story. So for my situation I stated previously, I work alone, I have 2 grass cut crews I send out in the summer with their own equipment and trucks, they both work alone, and I have 3 subcontracted inspectors that also work alone. I am not at risk for a claim according to the way the laws are written. So for my circumstance, I will not opt in for a policy that doesn't apply to me. If a company forces me to comply with their rules and doesn't accept a waiver, I tell them to accept the waiver or take a hike. I write about 100k a year in subbed work, at that rate the policy would cost me about 10k a year, and unless this company is going to double my profit margins and give me unicorns and rainbows, it's not worth it.


----------



## Wannabe

Luck.


----------



## bigheaded

Well I purchased the WC Insurance, it wasn't as bad as I thought. I guess it is a small price for a piece of mind. thank you all or replying


----------

