Commercial account requires workers comp. on outside contracters?!

Discussion in 'Business Operations' started by RedSox4Life, Apr 17, 2009.

  1. RedSox4Life

    RedSox4Life LawnSite Bronze Member
    from Mass
    Messages: 1,716

    A couple days ago I got a phone call this morning from the director of a large commercial account I have. It's a good account, I've been working there for years and their annual bill usually runs in the neighborhood of $8k.
    The director tells me that they're being audited by their insurance company and they need my insurance certificate. i assume she means liability so I run up there and drop it off.
    This morning she calls again, and says something to the effect of:
    I am and have been required to carry workers comp. on myself, and since I don't have it, I can't perform any work there until I am covered, AND, since I worked there last year without workers comp., THEY have to pay the insurance company what it would've cost for 2008.

    Keep in mind I am a sole prop., not an employee, and Mass. state law DOES NOT require me to carry workers comp. insurance.

    I got quoted for a workers comp. policy based on last years work, for $2k.

    So $2k plus the $1.3k I pay in liability, it would cost me $3300 per year in insurance alone for me to keep an $8,000 account.

    Today was a great day.
  2. newtostone

    newtostone LawnSite Senior Member
    from NY
    Messages: 681

    Understand where you coming from but that's why commercials pay well. They have requirements. Just get it and keep moving and if you cant afford it your not charging enough.
  3. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    it's not out of the ordanary. Just be thankfull it's NOT government.
  4. lilweeds

    lilweeds LawnSite Senior Member
    Messages: 595

    Some comp companies are requiring their policy holders to do that. That being said from what my agent says, it is ILLEGAL for the insurance company to to that. Now how do you handle it? I don't know. Most insurance companies will accept a signed release. I would ask your customer if he can put the person who audited the policy in contact with you.
  5. terrapro

    terrapro LawnSite Bronze Member
    Messages: 1,234

    Here in MI if you do not use any of your work comp and you do not have employees you will get refunded a large portion of your yearly comp bill. For instance my comp for me is $900something, well I can be refunded at the end of the year up to $700something if I dont have any employees.
  6. MysticLandscape

    MysticLandscape LawnSite Bronze Member
    Messages: 1,020

    What kind of policy did you take out thats 2k?
  7. RedSox4Life

    RedSox4Life LawnSite Bronze Member
    from Mass
    Messages: 1,716

    The funny thing is, their ins. agent is the same ins. company I use, so I did end up going to talking to one of the guys in the office, he said he'll "Look into it"
    This is VERY interesting, I'll look into it, thank you.
    I didn't buy the policy, just got a qoute. It was based off of the amount that the customer had to pay retroactiveley to cover me for 2008. Just workers comp.
  8. dougaustreim

    dougaustreim LawnSite Senior Member
    Messages: 488

    The other thing to consider is what if you actually get hurt. A lot of your personal health policies will balk at paying for injuries that occurr while working. Also, your personal policy, even if it does pay for medical costs will not reimburse you for lost wages.

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