5 Ways Contractors Can Reduce Risk (That You’re Probably Missing)
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As a contractor, you have enough to worry about.
That’s why, for this blog, we’re discussing the Top 5 Ways Contractors Can Reduce Risk. There is a lot that may be going under your radar, and we’re here to make sure you make the best decisions for your business.
Let’s kick off this edition of Top 5!
Managing Certificates
One of the biggest source of claims for contractors is subcontractors.
That’s why it’s so important to have a certificate management system. This will allow you to create a certificate of insurance for the subcontractor while they are doing work for you. It’s important to have proof of them bieng insured and that you are listed as additional insured.
There are a few ways to go about this, but if you need any help feel free to contact us!
Workers Compesantion Exemptions
Confusion can cause chaos.
No, we aren’t just fans of alliteration. The exemptions around Workers’ compensation can be confusing, and you do not want to be caught unprepared. We’re here to let you know that a workers’ comp exemption only applies to the person listed on the policy. If you hire a contractor, and they bring on subcontractors, those subcontractors are not covered. They have to be added as additional insured, or you’ll be responsible for whatever could happen to them.
Make sure whoever is on your job site is actually exempt.
Get Yourself A Construction Attorney
This might seem like a simple one, but sometimes those are the easiest to fumble.
Not all attorneys are the same. Just like you wouldn’t hire an electrician to do plumbing, you shouldn’t expect any attorney who doesn’t specialize in construction to be able to accurately consult you on a project.
When it comes to a new project, make sure you have a construction lawyer review the contract and not your cousin’s friend who happens to be a divorce lawyer.
Properly Clasifying Your Employees
There is no such thing as a 1099 employee.
We’ll give you time to pick up your jaw off the floor.
A 1099 is just a tax form used to show how you paid your independent contractors. But under Florida law they can still be classified as stationary employees which means you would be responsible for anything that could happen at the worksite.
Be sure to properly classify your employees as W-2 and include them in your workers’ compensation policy.
Know The Insurance Requirements
Knowing is half the battle.
That’s why you should know the insurance requirements for a project before you put in a bid. We’ve seen several scenarios where a contractor wins a bid, is excited, and is then deflated when the insurance requirements cut into their profit margins.
Work with your insurance agent to understand the insurance requirements and their cost. Then you can put in an accurate bid with those costs accounted for.
As a contractor, the less surprises, the better.
And that’s it, the Top Five Ways for contractors to reduce risk. We hope this blog has been helpful, and if you have any additional questions we didn’t cover, feel free to contact us! We’re always looking to give a helping hand!