Workman's comp insurance

[madcowscarnival]

Just a quick question for anyone else that is the sole Owner/employee of an Engineering firm.

My City recently asked for a workman's comp certificate in order to renew my business license. I was always under the impression that the Owner (or an officer or family member) were not required to carry workman's comp (or possibly even claim against it). I'm sure this varies wildly from State to State, I'm just curious. I do small fish Engineering and my wife helps with the paperwork from time to time. The cost of that insurance (if I read the State's actuarial tables correctly) is about $3k/year. That's not chump change, especially for something I possibly might not even be able to claim (which I fully understand from an insurer's perspective - I think I feel carpal tunnel coming on as I type).

I know any opinions are worth what I've paid, I'm just trying to assemble information before a meeting with my insurance agent next week.

 

[mjr6550]

I am in PA and that is the case. Not required and cannot file a claim.

 

[Ron]

I'm in Florida and principals of a company have the option of not having Worker's Comp. I have it anyway and the cost is nowhere near 3k per year.....much less. Check with The Hartford Insurance Company. How you classify your work makes a big difference in the premium. If your work is mostly in the office, your rate should be fairly low unless your state tacks on a bunch of useless stuff.

 

[madcowscarnival]

Ron, the opt out option was my understanding as well. I spoke with my State Workman's Comp division, and they pointed me to an exemption form, but it specifically dealt only with construction trades (which I would think more critical to have workman's comp). My NCCI code would probably be 8602 for Engineers/Architects primarily clerical work; I seldom leave my desk let alone office. The rates I wrote initially were from a link the State has that quotes rates from several major insurance carriers. My primarily issue is opposing something I could never legitimately claim; thus far, neither the City or State has a specific answer. I already pay into the unemployment pool from which I can never draw, and have never had employees that were eligible to do so (wife).

Thanks folks. This gives me some more questions when the insurance people get here.

 

[XR250]

Im in NC. I don't carry it and only have a few infrequent clients who require it so it is not worth the $600 for it. The clients can simply pay like $10 and somehow add me to theirs when then want me to a do a job for them. FWIW, I don't carry GL either only PL. I usually get about 10 requests per year for my GL policy. I simply send them my PL binder and that seems to placate them.

 

[Terratek]

Wow, that may be a local thing as it is not required where I work. Some clients require their vendors to carry it, though.

Worker's comp is relatively inexpensive for consulting work. I've priced it out for geotech and it goes up substantially higher (relatively) if you perform drilling in-house.

You didn't ask, but I think paying for worker's comp is a no brainer. If you do not have it, you must notify your employees that you don't. Also, when you don't carry it, all limits to the liability an employee can hold you to are removed, in addition to not being insured. Worker's comp acts as insurance AND by carrying it, you also benefit from increased legal protection than if you don't.

 

[SteelPE]

I carry both GL and Workman's comp and I'm a SP. I have had these requested a few times and for the cost (under $1,000 per year for both), it didn't make sense to not have them. In my instance, I was paying some insane rate for my PL policy that was set up by a former employer. I managed to get the cost of the PL policy down to something I could swallow better and then decided to add these two additional items for piece of mind.

 

[bigmig]

talk to your accountant. they will help you out. you will never take a workman's comp claim out on yourself....hence the opt out for single person companies.

 

[Mr168]

My understanding is that in some states, it is dependent upon how you file. For example, a sole proprietorship or LLC would not need the comp coverage, but the same individual filing as an S Corp would. Same can apply to liability insurance. My wife is going through this currently with her CPA as the owner of a small salon.