Contractors Insurance

Contractor Insurance in New York.

Contractor Insurance in New York.

I just got a call from a personal insurance client, to handle his contractor insurance in New York for a nice sized contract he anticipated receiving. His 25 years experience were great but I don’t think he had any idea how to run a contractor’s business. Never before insured but wanted General Liability and Worker’s compensation for installing drywall and metal studs. This was the only job he had lined up but was expecting more jobs to come from it.

Home Repairs

Contractor’s on Roof

I had explained to him how this worked for contractors insurance and that it wouldn’t be cheap, based on himself and 3 employees. The problem he has (and many contractors like him) is they enter into work agreements, without knowing their costs involved, then try to find cheap insurance.

So based on the information he gave me, the General Liability costs for $500,000 of coverage the the GC (General Contractor) required would be $3,400 per year. Then the Worker’s Compensation he was required to carry, would cost him $14,700 for his 3 employees. So the total cost of insurance for the project he was to take on would be $18,100.

His total contract was to pay $20,000. Certainly not enough to justify his time and energy involved in this contract. So his next plan was to hire temporary worker’s instead of his own but that wouldn’t eliminate the worker’s compensation the temp company would have to pay on his behalf. He would still have worker’s compensation withheld from his gross payment. He did not know enough to estimate his costs to doing this job.

New York Contractors – know your costs before going into a project. Don’t say you can do this for x dollars, when you don’t know your costs ahead of time. Talk to an insurance professional BEFORE you enter into a binding agreement.

Contractor Insurance in New York.

Tom Larsen, Licensed insurance broker

 

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