What kind of Insurance to ask for

Question

Hello BP,

We’re getting the exterior of one of our propertied painted. The painter had their insurance agency send over proof of insurance, it says that he has a 2 mill general liability policy, 1 mill individual limit. In the part about Worker’s

Comp, he doesn’t seem to have any. Is this a big deal? In what sort of situation does worker’s comp come into play and could him not having this affect us negatively should something happen?

Thank you!

Sarah Brown · Answer

If he has anyone at all helping him on the job, insist on workers comp.  If he doesn't have it and one of his employees gets injured it could hit your insurance for payout.

Bill C. · Answer

@Frank Chin

Yes this is what I thought thank you.

I have a lot of extra umbrella insurance so this makes sense. This job is in New Hampshire too which is relatively low litigation.

Thanks!

Bilal

Frank Chin · Answer

@Bill C.

I had a business with 8 employees. For safety sake, I got them all on W2, got workers comp thru the state, disability insurance. etc. Good that I did, had a small fire in my shop, several employees wound up in the hospital, one for over two weeks, and thank goodness it was covered or else someone who be on the hook for $20K. I saw the hospital bill. The one in the hospital was originally paid as a 1099 contractor, and he wouldn't had been covered I didn't change him to a W2 employee.

Now, about the painter you're using. Sounds like he'll be a solo contractor who is exempt from carrying workman's comp, if PA law is the same as NY. He'll be operating like the plumber I used for many years who comes alone for jobs, like fixing a leak. On some occasions he needs a helper as when he changes hot water tanks. At one time he asked if I can help and he'll skip bringing a helper. But I'm not that strong and I'm afraid of dropping a heavy tank going up the stairs. For these jobs, he brings a helper, usually a young kid and I'm sure he has it on down a 1099 sub contractor. These subcontractors usually don't have workman's comp. Doubt he'll go out and get a workman's comp policy for a kid for the occasional job like help lugging a hot water tank.

For painting contractors, usually they have helpers who's not on W2's but 1099 contractors. Owner is solo, thus no WC for him. What's the risk? He or his workers can fall off the ladder, don't have workman's comp and technically can sue you, claiming some type of negligence. That's why I get extra coverage on my liability umbrella policy for my rentals.

Finally, in answer to your question, don't believe small contractors have their own WC policies.

Bill C. · Answer

@John Mocker

Hi John,

I responded below, same question... does the fact that subcontractors have their own policies matter at all? I don’t think worker’s compensation is included in those... he said this hasn’t come up in 27 years

Thanks!

Bill C. · Answer

@Sarah Brown

Thanks for the info... he said the subcontractors have their own policies but I don’t think that includes worker’s comp either... should I still insist on it?

He said this hasn’t come up in 27 years

Andrew Pope · Answer

NY insurance agent here.

For workers comp, if he is a solo operator, he would most likely be excluded on his policy anyway. If he has employees, then he will need a workers comp policy.

Frank Chin · Answer

@Bill C.

When I had my business, workman's comp was not insured via the insurance carrier that issued my business insurance, but through the state, in my case, NY State Insurance Fund. I can also also obtain it via private insurance.

Here is info on PA workers comp. PA workman's comp

Similar to NY, in PA, the contractor can either obtain insurance through an insurance carrier, the State Workers Insurance Fund, or self insure. You'll have to ask him how he's covering it. It likely it's not done through an insurance carrier handled by the insurance agency as in my case, but the state. Unlikely he's self insured unless it's a large contractor.

Technically, the worker can sue either you or him, but you can get after the contractor under his liability insurance for negligence, failure to get insurance. For owner occupied properties, including duplexes, triplexes, my homeowners insurance covers workman's comp in the event the contractor doesn't have it. For rentals, it's not included and I was told I have to get my own policy to have it covered.

What kind of Insurance to ask for

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