Sunday, July 17, 2011

Cheap Business Insurance For Painting Contractors

Obtaining Cheap business insurance for painting contractors depends upon what type of insurance you will need. There are two types of insurance, general liability and workman's compensation. In order to start deciding what insurance policy you need to obtain it is best to understand what each policy is and what it may cover, in addition to the knowing what the nature of your work, such as having employees or subcontractors or will you be subcontracting.You may need just liability insurance to operate or you may need to carry workman's compensation. In the beginning, if you have no employees and you have no subcontractors and will not be subcontracting, you  can choose to carry just general liability insurance for your paint contracting business.

When discussing issues involving workman's compensation policies this article will pertain to NJ laws, as each state may be different when dealing with workman's compensation policies please check your state laws. In NJ you must have a workman's compensation policy for any employee you have, even if you have dayworkers or illegal aliens working for you. You also have the option of carrying a workman's compensation policy for case you become injured.

The cost or premium for a workman's compensation policy is based upon a rate determined by your state's Workers Compensation Bureau times your payroll, plus some fees. When getting the policy they will ask you what you pay yourself and what do you pay your employees to determine an amount. At the end of the year they will set an appointment to audit you and determine how much your payroll actually was. If it was less than what you stated you will receive a reimbursement check, if it was more then you will owe money.

If your business will be sub contracting then you should have a workman's compensation policy and in NJ you must elect to have one for yourself,  employees will then automatically be included. If you do not provide the General Contractor with an certificate of insurance that states you elected coverage for yourself / proprietor, then that General Contractor paying you will be charged on their policy a premium based upon your payroll as if you were an employee not a sub contractor.

As a General Contractor, if you plan on using sub contractors you should carry a workman's compensation policy for yourself which will automatically cover any employees if you have them. However, although not required, if you do not have a workman's compensation policy any sub contractor who cancels their policy or lapses without you knowledge may come after you and sue you if they become injured as well as any employee of theirs who may become injured. It is important as a General Contractor to get a certificate of insurance from all sub contractors that states they have elected workman's compensation for themselves / proprietor.

If an employee is hired from another state and will be working in another state then the workman's compensation policy must be purchased from that state. There is also a part II of the workman's compensation policy that is rarely used which is Employer's Liability. This covers claims arising out of injury to an employee that are not compensated under the applicable workers compensation law. An example would be - Suit brought by an injured employee who is illegally employee.  In certain instances illegally employed minors or illegal aliens are not entitled to WC benefits and may elect to sue the employer under common law.

Liability insurance will cover any damages that may occur to the property while work is being preformed. This is a set amount and a yearly premium that is usually very affordable. Some places that may contract you may require a certain amount of coverage. If you only do residential maybe you want a premium base upon a million dollars, however a commercial establishment may require a policy based upon a few million dollars.

In order to get cheap business insurance for your painting business you must know the exact policies you must carry and get multiple quotes.

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