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EP246: How contractors can avoid costly insurance mistakes

⏱️ 25:17 🎤 Brad Huebner
AUDIO EPISODE
EP246: How contractors can avoid costly insurance mistakes
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Chapters

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  • 0:00
    Subcontractor Insurance Imperative
    General contractors must collect subcontractors' insurance to avoid paying their worker's comp during audits, potentially costing thousands.
  • 1:42
    Worker's Comp Exemption Forms
    Owners in some states can be exempt from worker's comp, but subcontractors must provide exemption forms or the general contractor pays.
  • 2:49
    COI Collection Protocol
    Always collect a Certificate of Insurance (COI) from subcontractors before they start work, and ensure it covers the entire work period.
  • 4:12
    Tracking COI Expiration
    Establish a system, like Google Drive folders and calendar reminders, to track and renew subcontractor COIs before expiration.
  • 6:44
    Revenue Categorization for Audits
    Categorize revenue by service type (e.g., roofing, kitchen remodels) for worker's comp audits to prevent being charged the highest rate for all work.
  • 9:06
    Value of a Good Insurance Agent
    Prioritize finding a knowledgeable, proactive commercial insurance agent over the cheapest policy, as they will advocate for you during claims and audits.
  • 11:25
    Professional Insurance Management
    Treat insurance as a serious business matter, require professional COI management from subs, and update your agent on all new assets.

Speakers

B
Brad Huebner
Host

Key Takeaways

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Always collect Certificates of Insurance (COIs) from subcontractors BEFORE they begin any work to avoid liability and unexpected worker's comp costs.

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Implement a robust system (e.g., cloud storage, calendar reminders) to track COI expiration dates for all subcontractors and ensure timely renewals.

✦

Understand that worker's compensation premiums are often categorized by type of work; accurately break down your revenue by service to prevent overpaying.

✦

Invest in a knowledgeable and proactive commercial insurance agent who specializes in your industry, rather than opting for the cheapest policy.

✦

Regularly communicate with your insurance agent about business changes, such as new equipment, vehicles, or location shifts, to ensure continuous adequate coverage.

✦

Never rely on a subcontractor's verbal assurance of insurance; always demand and verify physical documentation.

✦

Be prepared for annual insurance audits by meticulously documenting all subcontractor COIs and revenue categorization for different services.

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