Insurance for Contractors 

1. How do I find a good agent?

When looking for an agent, check to see if the agent has had prior experience with construction customers. It's vital that the agent knows about your business and can speak your language. You also want to find out if the agent belongs to your local construction association.

2. What is this audit process all about? Why does the insurance company audit my records?

By reviewing your payroll, we base your premium on YOUR estimate of payroll, subcontracted work, etc. We perform the audit to match the ESTIMATES with the ACTUAL figures. You may get money back, or you may pay more depending on whether your original estimate was higher or lower than the actual number.

You need PAYROLL RECORDS. It's important to allocate payroll to separate and distinct construction operations. It's vital to keep accurate records to show this. Organize payroll by type of work or job and allocate payroll to each category.

BEWARE: If you don't do this, most states require us to allocate the payroll to the highest rated job class.


3. How can I budget properly for insurance payments?

As stated above, it's important to give your agent the accurate payroll estimates up front and also if your payroll changes during the policy term.

It's important to know that you may by held responsible for the general liability and workers compensation of any uninsured contractor. You need to obtain the original certificate for both general liability and workers compensation when you hire them.

Also, take advantage of the billing option which best suits you and your business cycle.


4. How can I lower my insurance costs?

Institute good safety guidelines and safety programs. You might also want to oversee a housekeeping program on the work site to avoid costly workers compensation claims.


5. How do losses affect premium?

Losses can affect premium both in a positive or negative manner. Having few (or no) losses can help your premium remain low. Having a large number of losses can cause your premium to go up.In most states, there are both debits and credits for loss experience. Your agent can better explain how this works.


6. If I report a loss, will you cancel me?

Not necessarily, it depends on the type of loss and how severe it is. It also depends on your willingness to work with your insurance company in preventing losses. If the losses are mainly smaller, you may want to pick a higher deductible and pay them out of pocket.


7. How do you set your insurance rates?

We have to go through a rigorous approval process in each state. When we have a new product, we have to file it with the insurance commissioner in each state who reviews it against the current market prices.