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Question for LCOs with employees

Discussion in 'Business Operations' started by dhardin53, Dec 30, 2007.

  1. dhardin53

    dhardin53 LawnSite Senior Member
    Messages: 710

    Do you have a minimum (annual) payment on your Workers comp?

    I have had employees in the the past, (not in LCO) and did not pay a minimum.
    I am looking at a large contract that will call for me to hire this summer. My Insurance man tells me theres a minimum now. And I could not believe the amount he told me.

    Been solo LCO from the beginning and i may just stay that way and not go after this work. I don't need the head ace.
  2. wrtenterprises

    wrtenterprises LawnSite Senior Member
    Messages: 331

    The minimum here in Pa. is around $1,500.00 annually. Haven't seen that number in quite a few years. My insurance carrier breaks it into 3-4 payments over the season so it's not too bad....

  3. dhardin53

    dhardin53 LawnSite Senior Member
    Messages: 710

    Thanks Wayne, Good information. But in Illinois I'll need a lot more than $1500. More like $4000. annually and $2.69 per $100 of there salary after I have exceed the 4 grand. I might find a lower annual minimum if I shop around but I hate to change my insurance on all my business.
  4. txgrassguy

    txgrassguy LawnSite Gold Member
    Messages: 3,083

    My Workers Compensation Insurance is tied in with my Commercial Liability Insurance.
    Although both are issued by separate companies, State of Texas mandated financial responsibilities for the different licenses I hold, more or less has a "shotgun" effect, on my premiums (yes plural).
    My minimum annual premium for these insurances is slightly over $8K.
    A great deal is hazard category based however my payroll last year was $257,000, not including what I paid myself. My end of year audit ended up costing me an additional $6,200.00.
  5. jcthorne

    jcthorne LawnSite Member
    Messages: 208

    There is nothing cheap about workers comp, but once you establish a history of paying without claims you need to shop for better rates through different companies. That first year you're going to pay a lot more per $100 of wages than the years to come.
  6. txgrassguy

    txgrassguy LawnSite Gold Member
    Messages: 3,083

    Usually true jcthorne, but not here in Texas.
    There is only one insurance carrier for commercial liability that will underwrite pesticide applications in conjunction with a workers comp policy.
    That said, I have received several discounts but the primary factor is payroll and task classification - this is what keeps the premium costs up.
  7. dhardin53

    dhardin53 LawnSite Senior Member
    Messages: 710

    jcthorne: if there was no minimum. It is $2.69 for very $100. i pay out in payroll. If I get one employee and pay him $300 a week I would have to also pay to the insurance plan 2.69 x 3 = $8.00. And that not bad at all. But with a high minimum like $4000 up fount, not till my hourly 2.69 amounts was over $4000 (witch could be my minimum annual payment). What would that be let me see. $4000 divided by 2.69 is 1487. So after i payed my employee/es $148.700. And them the addition 2.69 per $100 of salaries.

    Thanks texasgrass: you have got your act together, good. In my short 54 years I have seen 3 guys get hurt bad at there work place and thank god for Workers Comp or the owners would be a goner. Plus many hundreds of times I've see people go to the emergency room for work related smaller injury's. Its not worth loosing all I have worked for all my life to loose it in the smallest accident of employees of mine.

    To be legit and fully insured it take a lot these days.
    And something that is very seldom address here.
    Also the liabilities of underage workers and family members working in LCOs

    This contract I am looking at is addressing all the possible liability to protect then form any of my actions. And really I don't blame then but it sure makes it hard to compete with the Low-baller that don't care and play the odds.
  8. fknippenberg

    fknippenberg LawnSite Member
    Messages: 49

    ask your insurance broker if he can arrange financing for you on the premium - it's pretty common and the rates aren't that bad. If he does that then you won't have to come up with the entire premium upfront.
  9. CALandscapes

    CALandscapes LawnSite Senior Member
    Messages: 946

    I'm doing some sub-contract storm relief work under a friend of mine's company and using his worker's comp.. he's charging me $15/$100 (15%) of the total we are paid.. Does this sound like a rip? BTW - I'm in Louisiana..
  10. fknippenberg

    fknippenberg LawnSite Member
    Messages: 49

    sounds shady to me - not sure the insurance company would like that if they did an audit. Technically sub's are supose to provide their own workers-comp...

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