What you may not realize is that there are special nuances, exceptions and considerations specific to trades and contractors.
To manage your workers’ compensation costs, not only do you need to understand the finer details of workers’ compensation insurance for trade contractors, but you must also have a plan in place to secure a competitive rate.
Here are three tips to help you make an informed purchase:
Generally, employees must be covered by a workers’ compensation policy; independent contractors do not.
However, trades and contractors are often the exception to this rule. Workers’ compensation compliance is dictated by state law, and most risk-averse fields may need to provide (or provide proof of) coverage even for subcontractors.
How to protect your company from trouble:
💡 Once you know which is which, our blog post will walk you through calculating payroll accurately: How to Calculate Payroll to Find Your Workers’ Compensation Cost.
You might consider yourself a general contractor or handyman, because you have a wide range of skills. But you probably don’t operate as a handyman — and that’s where trouble can set in.
This is a common misconception particularly within the skilled trades. For example, if you primarily do plumbing work, but could also step in when a customer needs drywall repairs, you may classify yourself as a general contractor or handyman when getting a workers’ compensation quote.
But from an insurance company’s perspective, you’re a skilled tradesperson that does plumbing.
Here’s why this is important:
In order to get the most accurate coverage and quote, select the class code and/or service that best fits the work you’ve done over the past 12 months. Focus on what you actually do, not what you could do.
Examples of trade industries and their class codes include:
You think you can get by without carrying a workers’ compensation insurance policy. You put it off until the last minute, when you need to provide proof of insurance to bid on a job.
It’s likely that you’re doing this for one simple reason: to save time and money.
While you may save money in the interim, if your non-compliance catches up to you it can result in:
The penalties for non-compliance vary from state to state, but they’re costly.
When you want to get the best deal but don’t know where to start, it’s best to consult with an online independent agency.
Since trade policies are more expensive than traditional workers’ compensation policies, it’s critical to lean on an agency that can shop around for the most comprehensive and affordable policy on your behalf.
At WorkCompOne, we can secure fast quotes, allowing you to get the coverage you need without delay.