Posted on January 4, 2012 by Jon Morgan

Contractor Licensing – Proceed with Caution!

Unlicensed subcontractors can essentially ruin your business.  Many contractors have good relationships with their subcontractors and know of the quality of work they can and will provide.  There are times though, in a pinch when you’re required to go with someone you don’t know.  Before you get yourself in trouble and start losing your customers, make sure you check these tips…

Licensing- Most states now require subcontractors to be licensed and insured.  Check references, and check with your local agencies before you sign a contractor/subcontractor agreement.  Most (if not all) states offer an online search for anyone to be able to see if their contractor/subcontractor is licensed.  If they don’t have an online search, you can always call and check to see if a contractor is licensed.  Here’s a few to get you started:

Oregon Construction Contractors Board

Indiana Professional Regulation License Look Up

Illinois Department of Financial & Professional Regulation

California Contractors State License Board

Michigan Department of Energy, Labor, and Economic Growth

If your state is not listed, go to your state’s website and search “Contractor Licensing” or “SubContractor Licensing”.

If you’ve found an unlicensed contractor in your area, and licensing is required, you can file a complaint with your states labor board.  Filing a complaint can help save time, money, and even lives.  Unlicensed and uninsured contractors are usually untrained and present a major risk.  Often they will offer their work at a discounted price, but with that discounted price comes higher liability and potential for shoddy workmanship.  As a licensed and insured contractor, you know what you went through to get licensed- and you know the quality of work you can provide to your clients.   Now make sure that the subcontractors you hire are licensed and insured.

Check out what can happen with a contractor/subcontractor relationship gone wrong here and find out more ways to protect yourself and your business.

Are you licensed but not insured yet?  We can help you find an agent in your state.  Get a free quote from insurance agents at EZContractorsInsurance.com

Posted on May 8, 2011 by Jon Morgan

For contractors in the construction trades, getting workers compensation coverage is usually a very expensive proposition. And keeping your workers compensation costs as low as possible will help your bottom line profitability. Too many contractors have a laissez-faire attitude regards to their workers compensation insurance.

What determines your workers comp rate?

  The rates are determined by the type of work that you and your company do. The workers comp rate is a percentage of your payroll cost subjet to a minimum premium and higher risk work equals higher workers compensation expense.  If you are doing  janitorial work, your rates are much less than contractors doing roofing work. The state that you do your work in also determines the cost of your workers compensation insurance. As an example, the workers comp rates in the state of Illinois are about double the cost of it’s next door neighbor, Indiana. When comes to the rates generally the workers compensation bureau of your state sets the rates. For established companies, the amount & size of any claims that your company has had will also affect your workers compensation costs. None or very few claims equals lower workers comp costs.

How to keep your workers comp rates as low as possible

It all starts with having a plan. A plan to keep your workers compensation insurance will consist of 2 primary areas.

1. The first one is being organized and keeping track of your payroll records. Many contractors sign up for a workers compensation policy and then don’t pay attention to payroll & project details.
2. You need to have a written safety plan in place. This should include regular meetings to go over required safety procedures that you expect your workers to follow.

Keeping Track of Your Projects

For many small contractor companiess, they do more than one type of project or work type.  For example assume you are an interior remodeling firm. On Monday and Tuesday you may be doing an interior painting job and then Wednesday-Friday you could be doing deck or fence job. Keeping track of the projects your contractor company does will help you keep your costs down. In the above example, 2 days were spent on painting and 3 days were spent doing interior carpentry.  Depending on your state, this could be quite costly. As an example in the state of Illinois, the workers comp painting class is approximately 14% of payroll. The workers comp carpentry noc class  costs around 24% of payroll. many insurance companies will put 100% of the workers comp payroll into the carpentry noc class. If you’re not keeping track of your projects and payroll, you could end up paying way more in workers compensation costs than you have too. If your company is growing , you could also end up with a big workers comp insurance bill due at your insurance policy expiration. So keep accurate records so that you don’t pay any more than what you absolutely have too.

Staying as safe as Possible

Staying as safe as possible at the worksite is just plain smart and also the caring/concerned thing to. First of all, in most small businesses you spend more time with your coworker than you do your own family.  And the last thing that you want to see is a coworker going home in a body bag or a wheelchair because of a preventable accident. In addition to affecting human lives, an accident also affects your companys productivity. The expense associated with finding & traning a new hire is very costly. In additon, the claims that you ultimately have or don’t have affects your workers compensation rates. Your workers comp claims records ultimately affects your rate.  So the bottom line is that the more that you build safety into the everyday work life, things are better all around.

OSHA is a great free resource for contractors. They have all kinds of brochures and safety tips for the taking.  The two big items of concern for the construction industry are falls and working around heavy machinery.  Please check out the OSHA site at soon as possible for your company & employees benefit.

Posted on March 31, 2011 by Jon Morgan

 Biggie # 1

Choosing the Wrong Agent or Broker. 

I’ve been in the business for quite awhile now. And many agents don’t have a clue about the coverages that contractors require. Most agents will just give you a quote without really knowing what they’re doing. Make sure that the agent you work with has the experience required to offer you the proper coverages. 
You also want to be sure that you work with an independent agent instead of what I call a “Tied Down Agent”. A “tied down insurance agent” only represents 1 insurance company. When the agent giving you a quote only represents one company, they don’t have any options other than the company they represent. The company that they respresent may not be your best coverage option. An independent agent can choose the company that’s best for you.   

Biggie # 2

 Buying a Claims Made Policy. Always buy an Occurrence Policy if Possible!

   Avoid claims made insurance policies if at all possible. Claims made policies for a contractor are the worst possible policy you can buy. Claims made policies allow you to make a claim on your policy only during the policy year they are in force. Contractors have claims down the road not in the same year as the project is built! However you should be able to find an occurrence type policy at a competitive rate.

 The problem with claims made policies is that you’re stuck with that policy. If you want to leave that company and go to another company you will have to purchase additional insurance to cover you for the next 10 years…that’s right 10 years! Why? Because in many states, customers can file a lawsuit for construction problems up to 10 years after the project was completed.

  An example: You build a new room addition, everything goes well and you and your customer are very happy with the final outcome… 4 years later your customer calls you and says that the roof is leaking and water came in the house and ruined his new $25,000 grand piano. He expects you to repair the roof, the drywall, wallpaper, carpets and, of course, replace the grand piano…

  A-Claims- made policy will not allow you to file a claim 4 years later unless you stayed with the same company the whole time. If you intend to shop other companies after the claims made policy expires you must make a decision, since you cannot make a claim against a claims made policy after the policy expires unless you buy extended liability coverage called a “tail.” The tail coverage extends the period of time you can report a claim.

 If you decide not to buy the “tail” you will not be able to report a claim against the claims made policy. ? And to make matters worse, some companies do not offer the 10-year extension. When your policy comes up for renewal with a claims- made policy you must decide.Do I leave the company and pay the additional insurance for coverage for the next 10 year period or go without? Do I stay with the same company? Their prices on the new year may stay the same or go up sharply. Do I switch to another company who has better rates and coverages? 

 This limits the marketplace for you, and makes it harder to accept a better bid from another carrier. Claims made policies may work in other lines of insurance, but for Contractors they are a disaster.  Take time after reading this report to look for your policy and see if your current policy is either an occurrence form or claims made…

 Biggie # 3

 POLICY EXCLUSIONS!!

 All insurance policies have exclusions. Make sure that you understand your policy. If not check with your agent or company to be the policy exclusion won’t affect you. Following are the primary exclusions that many policies contain.

     DESIGNATED WORK: Most general liability policies automatically cover a business for just about any type of work that it engages in during the policy year.  Let’s say a sub’s premium is based on the carpenter classification.  Although, that’s what he does 90% of the time, he may do a little roofing, electrical, or plumbing work.  Most policies will cover him for this other work, and if he does enough of it, they’ll just charge him accordingly for those classes of work at his year end audit.  If an underwriter didn’t want to cover his roofing or electrical work, he/she could use the designated work endorsement to exclude those classes.  This exclusion could be nasty.

  INDEPENDENT CONTRACTORS: Claims arising out of: The acts or omissions of independent contractors while working on behalf of any insured, or the negligent hiring or contracting, investigation, supervision, training, retention of any independent contractor for whom any insured is or ever was legally responsible and whose acts or omissions would be excluded .  If you use subs, this exclusion can be a killer.

 FORMALDEHYDE: Claims arising directly or indirectly out of formaldehyde whether or not the formaldehyde is airborne as a fiber or particle, contained in a product, carried or transmitted on clothing contained in or a part of: any building, building material, insulation product or any component part of any building.

  X.C.U.  Explosion, collapse, and underground property damage.  Not a good exclusion for Grading, Excavation, Sewer, Plumbing,  Septic, and Fencing contractors just to name a few.

  ROOFING:  Some roofing exclusions are plain and simple. NO ROOFING.  Some are not as strict.  You must read the exclusion care-fully.  Some roofing exclusions say there is no coverage while the roof is under construction or repair.  For example: You tore off a roof, and since the weather forecast called for sunny skies, you decided there was no need to cover the roof overnight.  It rained.  There is no coverage.  Read all exclusions carefully.

  DEMOLITION:  Plain and simple.  No demolition

  SUBSIDENCE:  Insurance does not apply to any liability arising out of landslide, mud flow, earth sinking, earth rising or earth shifting.

  LEAD:  Claims arising out of the actual or alleged presence or actual, alleged or threatened dispersal of lead, lead particles or products containing lead.

 NUCLEAR, EARTH MOVEMENT

 MULTI UNIT RESIDENTIAL: Any work in connection with the pre-construction, construction, post-construction, reconstruction, exterior remodeling or repairs of any multi-unit residential building

 NO APARTMENTS, CONDOS or TOWNHOUSES

 EMPLOYMENT RELATED PRACTICES:  Refusal to employ, wrongful termination, coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or other employment-related practices, policies, acts or omissions.

 PESTICIDE, HERBICIDE ANDFUNGICIDE EXCLUSION:  Not a good idea if you are a landscape contractor.

 PRIOR ACTS:  This is a very severe exclusion. This says that any work you did prior to the policy date is not covered.  For contractors this can be a death sentence on all prior work. 90% of all contractor claims occur after the work was completed.

 EXTERIOR INSULATION ANDFINISH SYSTEM:  Exterior insulation and finish system means the design, manufacture, construction, fabrication, preparation, installation, application, maintenance or repair, including re-modeling, service, correction, or replacement, of an exterior insulation and finish system (commonly referred to as synthetic stucco) or any part thereof, or any substantially similar system or any part, including the application or use of conditioners, primers, accessories, flashing, coatings, caulking or sealants in connection with such a system when performed  by you.

 FOUNDATION WORK:  Claims arising our of foundation work, including but not limited to the design, specification, inspection, construction, installation, repair, replacement, improvement or reinforcement of any foundation or any part of a foundation.  Foundation means the entire substructure below the first floor or frame of a building, including but not limited to any footings, footing beams, piers, grade beams, pilings, pilings or supports upon which the building rests.

If any of these exclusions or other exclusions in your policy are a problem for you, one of three things happened.

• You did not tell your broker that you do this kind of work.
   
• You did tell your broker and he was not listening.
   
• Your broker does not have enough knowledge about construction insurance.

 Biggie # 4

 Subcontractors:

If you subcontract any work out, you need to be sure that you understand how to manage your subcontractors. If you don’t the results can mean financial disaster. You need to make sure that you have a subcontractor agreement that includes the following items for every sub-contractor that walks onto the job site.

• Certificate of Liability insurance from each subcontractor. The limits of the subcontractors insurance policy needs to be at least equal to or greater than the amount of liability coverage that you have.
  
• The Subcontractors general liability insurance policy needs to name you or your company as an additional insured on their policy.
  
• Certificate of Workers Compensation Insurance.
  
• A hold harmless clause in your favor.
  
• An indemnification agreement in your favor

 Thank You for taking the time to read the 4 Big Ones. You could be just minutes away from lowering your insurance costs. Take the first step and apply now for a cost-free, no-obligation quote.

 Click here for a general liability insurance quote.

Posted on September 26, 2010 by Jon Morgan

  If you carry workers compensation insurance, maintaining detailed records can make a big difference to your bottom line profit.  As an example, a contractor that is a sole proprietor & wants to include himself on the workers compensation coverage will need to insure themselves for (depending on the state) $47,000 – $52,000 of owner salary regardless of whether they actually make this amount of net income or not. As an owner, your net income may be only $35,000. You will still need to insure for your states workers compensation owner minimum.                          

He's Safety Minded!

  The owner salary minimum requirement depends on your state and your company setup. As an example, the State of Illinois requires sole proprietors to insure for 50,800 (assuming they choose coverage that is). For corporations in Illinois, the required officer minimum workers compensation is $20,800.

   Most small business owners wear many different hats. You are doing your craft as well as doing paperwork & returning phone calls. You may run to the local hardware store to pick up some supplies or tools. So as an owner there are many different types of tasks that you’re actually doing. Correct classification on your workers compensation policy will save you mega dollars!!

   Many workers compensation policies are setup incorrectly.  The owner is 100% in one classification (usually in the highest risk class). So if you are a residential homebuilder, this could be costing you a couple G’s per year. And that’s just the extra cost on you. Now imagine that you have 7 employees. And if each employee is classified 100% properly, you could be paying through the nose. If you need help determining if your workers compensation classification, has been setup correctly be sure to get in touch with us at  http://www.ezcontractorsinsurance.com

Posted on September 3, 2010 by Jon Morgan

In an industry that’s full of many safety risks, such as the construction industry, safety equipment and fall protection is vital at every job site.  Falls are the leading cause of fatalities in the construction industry.  Each year over 100,000 injuries and deaths are attributed to work related falls.  Every employer has the responsibility to act and ensure the protection of their workers.

The General Duty Clause of the Occupational Safety and Health Act SEC. 5. Duties 29 USC 654 states that each employer 1) “shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees…”

In addition to having to comply with the General Duty Clause, each employer must comply with all safety OSHA standards, including fall protection standards. Any time a worker is at a height of four feet or more, the worker is at risk and needs to be protected. Fall protection must be provided at four feet in general industry, five feet in maritime and six feet in construction (29 CFR 1910, 29 CFR 1926).

Although general contractors often work with subcontractors, the company that holds supervisory control over the worksite must be responsible to prevent and detect all safety violations, whether or not those violations directly affect their own personal employees.  This is even more important when the supervising company has the power to correct safety and health violations. If the subcontractor is considered an employee of the general contractor, OSHA holds the right to cite the general contractor for any violations.

It is important for general contractors to have a fall protection safety program in place.  A fall protection plan must be well established and enforced.  The fall protection program should provide a method to: identify, evaluate and eliminate or control fall hazards.  The fall protection program should also ensure: effective training of personnel exposed to fall hazards, proper installation and use of installed fall protection systems, rescue systems and rescue procedures. There should be someone who is responsible for monitoring accountability and enforcing 100 percent tie off policy.  In addition to this there must be a competent person who is capable of identifying hazardous or dangerous conditions in the personal fall arrest system or any component thereof, as well as in their application and use with related equipment.

All outside contractors working in or on the premises should be required to follow the guidelines set forth in the fall protection program.  Contractors in post-award meetings should also be informed of these requirements as well as any other on-site construction rules. Workers should also be reminded of all fall protection and safety rules on a consistent basis. A great way to do this is toolbox talks that continuously educate workers.  Toolbox talks are generally short, interesting, and relevant.

Many companies now realize that injuries and prevention have an influence on indirect and direct costs, such as workers compensation, quality,

OSHA fines, insurance rates and productivity.  Studies show that a good safety program can save $4 to $6 for every $1 invested.  An enforced fall protection program will lead to decreased falls and accidents, improved employee morale and productivity and ultimately better cost control.

Hy-Safe's Mr. Fall No More Teaches the Importance of Safety

Hy-Safe is a turnkey fall protection provider single source for risk assessments, custom design, engineering, fabrication, training and annual recertification. As a fall protection leader, we work hard every day to provide the utmost in customer service, while bringing to you innovative solutions and the highest quality fall protection equipment.  Every Hy-Safe engineered fall protection system is 100% safe, OSHA compliant, and meets ANSI standards.  Call us today for a free assessment of your company!  800.642.0775   www.hysafe.com info@hysafe.com

Follow Hy-Safe and EZContractors Insurance on Twitter @FallNoMore @EZContractorIns

Posted on September 3, 2010 by Jon Morgan

This video outlines the traps to avoid when buying general liability insurance.

Posted on August 26, 2010 by Jon Morgan

Workplace Safety can Lower your Workers Comp Costs

Per OSHA, any excavations deeper than 4 feet require bracing, such as trench boxes or stepping the excavation.  Some contractors try to cut corners, and have the trench boxes on site, but to increase production and save time, they choose not to use them.  More pipe can be laid without using a trench box, but the risk of injury is so much higher.  Contractors workers comp claims can skyrocket because of this.

Without the use of a trench box, during excavation, the stability of the embankment is reduced due to the removal of the soil. Natural soils can weigh up to 140 pounds per cubic foot.  If a man is standing in a 5 foot excavation and the wall collapses, that’s equal to approximately 700 pounds of soil and dirt falling onto the worker- from each side.

Currently OSHA has been frequenting job sites on a more regular basis.  While OSHA is more likely to go to the high profile projects, if an accident happens on a residential job, they’ll be there too.  A contractor we know was fined in the range of $4000-$5000 dollars for having workers in a trench that was deeper than 4 feet, without the use of a trench box.

Yes, an OSHA fine is definitely not good- not for your wallet and not for your business.  Imagine facing an employee injury without the right workers compensation coverage.

To get a free workers compensation insurance quote, visit www.ezcontractorsinsurance.com

Posted on August 9, 2010 by Jon Morgan

Now that you have become more comfortable using Twitter, we’ve got some helpful tips that will make using Twitter easier, and some ways for your account to gain more exposure.  There are several sites that work hand-in-hand with Twitter, that allow you to access your Twitter account with more functionality.  Both HootSuite and TweetDeck are two really great sites you may want to check out.  TweetDeck is a program that is downloaded to your computer, and HootSuite can be used through the internet, or downloaded to your desktop or even your iPhone.

HootSuite is a great way to manage multiple Twitter accounts, or if you have multiple people managing your Twitter account.  When you have more than one person managing an account it allows you to see replies that people on your team have made to followers.  HootSuite allows you to see what other people post, people that have mentioned you, and your direct message inbox, all at once.  This is a great site because it lays everything out for you on one page!

Both HootSuite and TweetDeck are helpful if you want to schedule your tweets.  By scheduling tweets, you can save yourself some time by not having log in to Twitter several times a day.

Through HootSuite, you can also view statistics, such as, popular tweets for the day, or who clicked on your tweets.  In addition, you can integrate your Google analytics with HootSuite.

You may also want to check out Twellow and Wefollow.  Both of these sites are sort of the “yellow pages” for Twitter.  On these sites you can enter some basic info and keywords about your Twitter account.  By submitting this information, it will make it more likely that your Twitter page will pop up under people’s searches.

Posted on August 2, 2010 by Jon Morgan

The most important aspect of Twitter is your followers, but how do you go about finding the right ones? You should consider the types of people that you want to connect with on Twitter.  Keep in mind that it is not the amount of followers that you have, but rather the quality of followers.  A quality follower is someone that meets one of the following criteria.

• Potential or current customer
• Vendors
• Other contractors or companies that have a strong Twitter presence
• News sources for contractors
• Fun or interesting people that have similar interests as you

The best way to gain followers is to search these types of people out and follow them.  By following them, it makes it likely that they will check out your page and follow you back.  To search for people on Twitter, click on “find people” at the top of the page.  Try typing in key words that relate to your company or products.  You can also go to search.twitter.com/advanced.  This is a more advanced search option that allows you to narrow down your search.  You can type in a key word, or search for people within your area.

Another way to find followers is to check out the competition and who they’re following.  You’re likely to find some quality followers for yourself this way.

It is also important to promote the fact that you’re on Twitter.  Include your Twitter information on your website, blog, or email – anything to get the word out there!

The main thing you need to remember is that Twitter is a social media site, so make sure to be social and interact with your followers.  Generally, you’re not going to get people interested in your company if you simply use Twitter to promote your blog or send out the same generic tweets about your company or products.  Seek out your followers and interact with them.  Be helpful and provide useful information.  Most importantly, be real!  People on Twitter want to feel like they’re actually talking to a person and not just a robot!

Check back soon for our next blog that will tell you how to use some Twitter friendly sites that will save you some time and make using Twitter a breeze!

Posted on July 28, 2010 by Jon Morgan

Contractors Can Use Twitter to Build Relationships with Clients

Twitter is a free social networking site that, believe it or not, can be a great tool for contractors.  It can help market your company, get your message out to clients and fans, and ultimately gain you more business.  Even if you’re not exactly media-savvy, have no fear.  We’ll take you through the basics and tell you what you need to know to get started on Twitter.

First, if you don’t already have a Twitter account, create one! Go to twitter.com and click ‘create account.’ Your username can be either your name or your company’s name; however, if you plan on delegating Twitter responsibilities to someone else, then use your company’s name.

After your account is created, the first thing you should do is change your avatar (or picture icon). The avatar is going to represent your company, so it should be a logo, a picture of yourself, or something along those lines. To change your avatar, click on ‘settings’ (at the top of the page), then select ‘profile.’ From here you can browse for a picture already on your computer and upload to Twitter.  While on your profile, you should also update some basic information about you company like your location, a short bio, and even a link to your website.

Next, you’ll want to send out your first ‘tweet.’ At the top of the page click on ‘profile’, from here you can type your first tweet into the box under ‘what’s happening?’ This can be something basic like introducing yourself or company to the Twitter universe.

You’ll also want to ‘follow’ people on Twitter.  By following others you can see their tweets and even comment on them.  By doing so, they will hopefully take a look at your profile and follow you back. Followers are ultimately what will help your company! To search for people, click on ‘find people’ at the top of the page.  You can search for people you know or other companies.  While on your search for people to follow, make sure to check out EZContractorsIns and follow us! We’ll be sure to follow you back! If you’re looking for some ideas for people to follow, don’t be afraid to check out some of our followers.

If you need help at any point, click on ‘help’ at the top of the page.  There’s even a business 101 section for getting started on Twitter.

Make sure to check back next week for our blog on how to get the most out of Twitter, along with a few helpful tips that make using Twitter A LOT easier!