Contractors Insurance Georgia State University RMI 4700

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Contractors InsuranceGeorgia State University
RMI 4700

• Rodolfo Vaupel
• 770-476-8784
• 770-354-5945 Cell

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Commercial General Liability

• Protection against expensive lawsuits
• General Contractor GC
• Sub Contractor

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General Contractor

• If a contractor hires a sub contractor to
  complete any aspect of a job, he is acting as a
  General Contractor (GC)

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General Contractor Protecting its Policy

• The sub contractors must have insurance with
  similar limits to the policy of the GC and the GC
  must be named as an additional insured.
• All the sub contractors must provide certificates
  of insurance
• Include a hold harmless agreement (AKA
  Indemnification agreement) in the contract with
  the sub contractor
• (Non insurance contractual agreements to
  transfer risk from one party to another)

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Sub Contractors

• If the contractor is hired by others to complete
  an specific part of the job he/she becomes a sub
  contractor

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Sub Contractors

• Always look for legal advise
• Carefully review the contract wording specially
  in the hold harmless agreements
• Update the insurance programs and remove the GCs
  that dont work with the subcontractor anymore.
• Send a copy of the contracts to insurance agent
  for review

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What to do if There is a Claim?

• Immediately notify the insurance carrier of any
  occurrence or offense that may result in a claim
• If the claim is made, keep records of all details
  of the claim or lawsuit including reception date
  and notify the insurance company immediately.
• Sent to the insurance company all documentation
  regarding the claim or lawsuit
• Authorize the insurance company to obtain records
  and any other information
• Cooperate with the insurance company
• Help the insurance company to obtain its
  subrogation rights

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However,

• Neither the insured nor the additional insured
  should make any voluntary payment, except when it
  is at his own expense or its related to first
  aid, or assume any obligation without the express
  consent from the insurance company.

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Workers Compensation Insurance

• Injuries and work related diseases regardless of
  fault. The employers are liable even if the
  employee had contributed that the accident or
  disease had happened (Negligence, no intentional)

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Workers Compensation InsuranceCoverages

• Part I (Generally Unlimited) Dont need to prove
  negligence by Employer
• Injuries or loss of limbs
• Work related diseases
• Medical Treatment
• Rehabilitation
• Income replacement (normally 66 2/3 of the
  weekly salary with a cap by state)
• Death
• Part II (with Limits) Needs to prove negligence
  by employer
• Employers liability

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The Law in GA says

• If there are 3 or more employees, the person or
  organization must buy workers compensation
  insurance (in a corporation, the owner is an
  employee, so if there are other 2 employees, that
  corporation must buy WC according to the law in
  GA)
• The owners and officers can be excluded from a WC
  policy in GA

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The real world says

• When a contractor hires a sub contractor, even if
  is an individual or sole proprietor, he will
  require the subs contractually to provide workers
  compensation insurance.
• This is because if something happens to an
  uninsured sub, during the time he is working for
  the contractor, the latter will be responsible to
  cover the benefits of the workers compensation
  insurance.
• Besides, the contractor will have an audit and
  the insurance company will collect the premium
  for all the uninsured subs and in many cases
  might cancel the policy if those where not
  declared at inception.

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How much is WC?

• Many factors
• Category (class code)
• Annual payroll
• Insurance Experience (Loss Runs-3 years)
• Experience modification factor (MOD)-
• Credits or debits (i.e. drug-free workplace,
  7.5)
• Safety Programs
• Knowledgeable insurance agent with access to the
  markets

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Are there Alternatives?

• New ventures and high risk exposures generally
  get placed in NCCI (National Council on
  Compensation Insurance) Assigned Risk rating
  pools
• NCCI
• There are some alternatives
• Alternative Companies
• There are many others in the voluntary market
  (generally with 3 years of loss runs and MOD
  equal to or below 1)

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Why buying Workers Compensation Insurance?

• Protection and peace of mind as any other
  insurance policy
• Required by law and contractual obligations
• If the contractor do not require WC insurance, he
  would normally make a discount out of the subs
  paycheck

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Can the owner or officer be included?

• Yes, but will need to add the owners annual
  salary.
• For sole proprietors and partnerships 50,200
• In a corporation is the actual salary when the
  salary is between 300 and 2600 per week.

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Insurance alternatives for excluded owners?

• Health Insurance
• Disability Insurance
• Life Insurance

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Multi State Workers Compensation Insurance

• WC is regulated by each state (except a few
  federal regulations i.e. Jones act, etc). Special
  emphasis in caps for workers replacement income
  by each state. Potential risks for uncovered
  gaps.
• Some companies cover incidental work in other
  states, but the workers need to reside in the
  state where the policy was purchased. Always
  notify the insurance company.
• In Florida is a felony not to have Florida
  workers compensation insurance.

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Commercial Auto Insurance

• Liability Limits
• By law in GA 25/50/25
• It is enough? NO
• General contractors are requiring commercial auto
  with liability limits of at least 1,000,000 and
  in most cases with an umbrella coverage as well.

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Commercial Auto Insurance

• Non-Owned Auto
• This coverage protects the employer from the
  liability of an employees vehicle when it is
  used for the business.
• Same limits as the auto policy

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Commercial Auto Insurance

• Hired Auto
• This coverage protects the insured against bodily
  injured and property damage when operating
  vehicles that are rented or hired.
• Same limits as the auto policy