Are construction vendor required to furnish proof of their nonspecific liability insurance coverage.?
After being audited we are being slapped beside a $20,000 penalty for not having the nonspecific liability coverage of our vendors on file.
Answers:
I believe they must provide it on demand ... more to the point, I believe that as an originating contractor, you are required to demonstrate your subs as properly insured and licensed (if required) on emergency - which means you have to hold proof readily available.
Check with your state's Business and Professions Code (which should own been the first half of your State Contractor's Licensing Board exam).
Without checking myself, it seem reasonable to me that having (as a contractor) secured a specialty sub-contractor to complete work that you hold originated incumbers you with the responsibility to gross sure that the sub is properly licensed (if necessary) and has proper liability insurance. Or, that you have the proper license (if required) and insurance to hire the labourer to complete the work. In this relationship, though - workman's comp, as well as a host of other employer responsibilities will likely come into play.
I believe the spirit of the deed against you is to make sure that you are not running an uninsured labour pool, or trying to carry around your state's labour and contracting laws. Again, the answer is probably within your B&P Code handbook.
Example: Say I own a handyman service business and a homeowner calls to articulate he bought some roofing material at the local DIY centre, but does not know how to do the brief. I tell him I can find him qualified labor, for a fee. We contract to do the undertaking and I go out and put together a crew then distribute them out to do the work. While doing the work, a member of that crew falls through the roof causing structural deface, a personal injury to himself, and an injury to a member of the household.
Who's paying whom?
If everything were right an proper afterwards the damage to the home, the injured member of the houshold and the injured partaker of the crew are being taken care of by the sub's liability and workman's comp policy - my liability insurance may be involved, too, if the sub's coverage is underprovided.
But in the absence of such insurance - the liability go to the homeowner (who simply wanted his roof replaced, was competent to put together the material and paid you, within good faith, to provide the labor). You, instead, sent out an uninsured crew ... where's the good faith surrounded by that?
The best way to prevent such a thing ... charge the originating contractor with the responsibility to take home sure that proper liability coverage is in place - all around. A $20,000 cost is pretty good incentive to keep the originate contractor on task. Again, check your B&P code handbook.
In certainty, as I am writing this, it seems to me that it was qualified in contractor's licensing institution - using the example of a class B Contractor's electrical-sub (class C) hanging a ceiling fan, falling, dropping the disciple, damaging the floor of the home and being himself injured.
Tony A-
Added: I'll bet a hail as to your insurance agent, or to the entity presenting to you with the requirement makes it adjectives clear.
Consider this, you have contracted to acquire and install an engineered truss system on a building. Six months after the job is finaled, the roof falls contained by ... who's paying whom?
Are you a licansed contractor? Building codes vary not just by state but by city.
If they slapped you next to the penalty then the likelihood are it's required. You should contact your city's building department and ask for the ordance that requires this.
Not by tenet, but usually by contract. You see, if you don't have GL coverage - or proof of gl coverage on file within the form of a certificate of insurance, the contractor's insurance company, upon HIS audit, will be charged as if you the vendor are an member of staff - the cost of the job gets added as wages to his audit.
So yes, that's ordinary. Source(s): agent, 21+ years
Related Questions:
Answers:
I believe they must provide it on demand ... more to the point, I believe that as an originating contractor, you are required to demonstrate your subs as properly insured and licensed (if required) on emergency - which means you have to hold proof readily available.
Check with your state's Business and Professions Code (which should own been the first half of your State Contractor's Licensing Board exam).
Without checking myself, it seem reasonable to me that having (as a contractor) secured a specialty sub-contractor to complete work that you hold originated incumbers you with the responsibility to gross sure that the sub is properly licensed (if necessary) and has proper liability insurance. Or, that you have the proper license (if required) and insurance to hire the labourer to complete the work. In this relationship, though - workman's comp, as well as a host of other employer responsibilities will likely come into play.
I believe the spirit of the deed against you is to make sure that you are not running an uninsured labour pool, or trying to carry around your state's labour and contracting laws. Again, the answer is probably within your B&P Code handbook.
Example: Say I own a handyman service business and a homeowner calls to articulate he bought some roofing material at the local DIY centre, but does not know how to do the brief. I tell him I can find him qualified labor, for a fee. We contract to do the undertaking and I go out and put together a crew then distribute them out to do the work. While doing the work, a member of that crew falls through the roof causing structural deface, a personal injury to himself, and an injury to a member of the household.
Who's paying whom?
If everything were right an proper afterwards the damage to the home, the injured member of the houshold and the injured partaker of the crew are being taken care of by the sub's liability and workman's comp policy - my liability insurance may be involved, too, if the sub's coverage is underprovided.
But in the absence of such insurance - the liability go to the homeowner (who simply wanted his roof replaced, was competent to put together the material and paid you, within good faith, to provide the labor). You, instead, sent out an uninsured crew ... where's the good faith surrounded by that?
The best way to prevent such a thing ... charge the originating contractor with the responsibility to take home sure that proper liability coverage is in place - all around. A $20,000 cost is pretty good incentive to keep the originate contractor on task. Again, check your B&P code handbook.
In certainty, as I am writing this, it seems to me that it was qualified in contractor's licensing institution - using the example of a class B Contractor's electrical-sub (class C) hanging a ceiling fan, falling, dropping the disciple, damaging the floor of the home and being himself injured.
Tony A-
Added: I'll bet a hail as to your insurance agent, or to the entity presenting to you with the requirement makes it adjectives clear.
Consider this, you have contracted to acquire and install an engineered truss system on a building. Six months after the job is finaled, the roof falls contained by ... who's paying whom?
Are you a licansed contractor? Building codes vary not just by state but by city.
If they slapped you next to the penalty then the likelihood are it's required. You should contact your city's building department and ask for the ordance that requires this.
Not by tenet, but usually by contract. You see, if you don't have GL coverage - or proof of gl coverage on file within the form of a certificate of insurance, the contractor's insurance company, upon HIS audit, will be charged as if you the vendor are an member of staff - the cost of the job gets added as wages to his audit.
So yes, that's ordinary. Source(s): agent, 21+ years
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