There Are Many Types Of Insurance For Business Owners – But DO NOT Exclude Workers Comp
Josh Cotner from the Contractor’s Choice Agency knows insurance.
It’s why Dmitry and Roofing Insights invited him to speak at a recent event in Atlanta.
You can read the first part of their conversation here.
Later in the same conversation, Cotner explains that contractors need insurance in order to stay in business, but that many of them buy policies that only protect their employees, and NOT themselves.
Their savings by NOT having a policy in place to protect themselves?
About $1,000 over the course of the year.
Of course, $1,000 is a lot of money, but in comparison to what the total cost would be if a business owner got hurt on the job, $1,000 is actually very cheap.
That’s why both Cotner and Dmitry are flummoxed that more business owners are willing to leave themselves exposed when it comes to their insurance policies.
“When things go wrong, the GC (general contractor) will always be the one who pays,”
Dmitry mentions.
This has actually been a point of contention among many in the roofing industry who feel it’s unfair that insurance policies only cover so much. Worse, in some cases these policies don’t even cover what they’re supposed to because once matters go to court, it’s anyone’s guess how things will play out.
Dmitry tells a story of a Romanian man he knew who lost part of his finger while on a jobsite. The boss didn’t want to pay the Romanian man, and then after a battle in court, the two eventually settled for $15,000.
“If it’s your jobsite, it’s your responsibility,”
Cotner says in noting that even though insurance is necessary, in some cases that isn’t enough to preclude contractors from being liable, and hence why Dmitry’s boss still ended up being out $15,000.
With insurance policies not being as airtight as one would hope, the question becomes:
How can a GC best protect themselves?
Cotner recommends setting up an LLC for your business. The process doesn’t take long, and you only have to pay a fee to the state to get registered.
The LLC prevents employees or customers from suing individual people. Instead, they’re suing a business, which can ultimately save contractors tons of money if their affairs are in order.
All this is necessary because no one wants to have their life decimated from an insurance claim, especially because many contractors know how easily it can happen to them.
Cotner knows a woman who lost her business because her insurance didn’t cover one of her employees who got hurt at a different jobsite, completely separate from her own.
Another man lost his house, truck, and all his tools from a worker’s comp claim.
This has led to many contractors becoming frequent buyers of Tylenol, due to the heavy amounts of headaches they encounter when dealing with injuries or jobsite malfunctions.
Cotner also advises roofers to remember that contracts don’t always prevent them from losing lawsuits because “the judge is always going to side with the little guy.”
That means if one of someone’s crew members damages an A/C line, even if it was improperly installed, that roofing company is going to be on the hook for the damages.
Is that fair? Probably not, but sometimes the law conducts itself in unfair ways.
“If the judge says you’re paying it, you’re paying it,”
Cotner warns.
But that doesn’t mean you shouldn’t take every precaution to protect yourself.
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