Why the need for Worker's Comp Insurance
 

Why do some companies require a one truck/one driver operation to have worker's comp insurance?

I know that I can buy a ghost policy for 800.00 and cover myself - but what is the point? I know it's worthless and can't stand the thought of wasting my hard earned money on it.

Re: Why the need for Worker's Comp Insurance
 

hmmm you incorporated then?....just curious why?...coulnt see any advantage to it myself...plz enlighten me :)

I've never been able to find an insurance company that will let you write Workers Comp on yourself. The reason I've been told is because every O/O would file claims against themselves and take the summer off.


If you can get it let me know. A vacation tax free would be nice.

OMG ...thats so funny n true....it never occured to me.
Like firing yourself to collect unemployment lol
What a call........yes insurance Co....my 1 damn employee was stupid enough to get hurt n needs $ .....oh sorry to hear who was he....ME!

North Carolina (maybe other states?) require 1 owner/ 1 truck and up to carry workers comp. If the o/o doesn't have worker's comp and gets hurt, NC holds the company (NC or not) that hired them responsible for paying. So the companies are just covering themselves.

In HHG, the I/C is required to carry a workmans comp policy on himself, and all his labor. They aren't cheap, either. Fortunately, in Wisconsin, I can get away with carrying an Occupational Accident policy on myself instead of a workman's comp policy. It's much cheaper. My Occ Accident/Work Comp policies run me about $350 per month. If I had a Workman's comp policy on myself instead of Occupational Accident, I'd probably be paying about $600 per month for all those policies.

And FYI - the Occupational Accident coverage pays lousy. I think it pays like 25% of your income at best.

yes i understand...the company....so why incorporate? I didnt.

Re: Why the need for Worker's Comp Insurance
 

Better read the fine print.

Those "ghost policies" are nothing more than a certificate to show your customer you have a work comp policy.

It does not provide any coverage to you as an O/O.

As was said, the customers require proof of work comp from each subcontractor, or else at the end of their policy year when their insurance company audits their books, the customer would have to pay for work comp on a percentage of the amount of money they paid you during that period.

Most customers do not want to pay that, hence the requirement that each subcontractor must provide a work comp certificate.

And FYI - the Occupational Accident coverage pays lousy. I think it pays like 25% of your income at best.[/quote]


Hmmm....what would Steve do. How would they figure out 25%.

hmmm k Rev....so your saying this is a furniture moving thing only?....right?
Hmmm didnt know Kblick was in HHG ...cuz he was talking about droping a trailer somewhere earlier....hmmm you guys drop trailers...i thought your all live unloads?

I should add that if you have one of those ghost policies, at the end of the policy year the insurance co. will audit your records, and as long as you can prove that you had no employees during the policy period, then you will receive a refund for all but about $200.00 of your premium, so the effective yearly cost of that certificate is about $200.00.

But the when you renew for the following year, it's another $800.00 (roughly)

At least that's how it worked when I was O/O dump truck.

When I had employees the work comp cost me about 12% of gross payroll if I remember correctly.

I never could see any sense in an O/O incorporating. If you're the driver and you're involved in a crash, you're personally liable anyhow whether your company is incorporated or not.

If you have employees then incorporation is a must.

Just curious, what is the percentage on a HHG operation? not including yourself, just labor.

Mines 9% for drywall, again this does not include myself.

My brother in law is in the roofing business.............sit down.............60% :shock:

Some insurance companies won't write "ghost polices." My first insurance company wouldn't, I'm not sure if the one I use now will or not.

Do the percentages vary much from a flatbed operation to say a reefer operation?

No, I'm not. When I was first interviewing companies, I found several who required a work comp policy. HHG, however, was the only industry who required me to carry one on lumpers as well.

Huh?

If I'm not mistaken, I believe it's about 10%, but it depends upon what state you're in. WI is a pretty decent state when it comes to work comp rates.

I've heard that roofing is horrible when it comes to work comp.

I would believe so. I'm sure the amount of insurance providers who actually write these policies are pretty slim. I couldn't find one independently who would write the policy - I ended up having to get it through my company. Those companies who do write them know the industry pretty well. The company that carries my work comp and occupational accident policies is Transguardwhich specializes in insurance for the moving industry.

Ummm k Rev...im confused...I thought we were only talking how it pertains to 0/oPs n own authority?

I don't see where it would be much of a difference, if you have employees they'll quote the rate that pertains to your business. They shouldn't care if you lease or have your own authority, they only care about your employees.

Re: Why the need for Worker's Comp Insurance
 

From the original post:

It's pretty clear we're talking about trucking companies that require their owner/operators to carry work comp insurance.

Pepe..you live in Califonia correct?? The state of CA requires you to carry Workman's Comp on yourself.. I do believe.

Pepe..you live in Califonia correct?? The state of CA requires you to carry Workman's Comp on yourself.. I do believe.[/quote]


In CA you sign a waiver and not have it if you're a one man operation. If you have any employees then you have to have it.

Most states will allow you to have an occupational policy in lieu of a workers comp policy. OOIDA has a couple that run about $140/month. One pays $400/week, the other $500/week. One of them has a lifetime benefit of $500M, the other $1MM, if I remember correctly. I would prefer the occupational policy. They are less costly and less hassle to collect.

You can sign a waiver for every state if your a one man operation. In some states like New Hampshire your not required to have it at all so in my case it doesn't matter.

OK - I think I located the information about WC insurance requirements...

http://www.comp.state.nc.us/ncic/pages/truckers.htm

Look forward to your interpretations.

Re: Why the need for Worker's Comp Insurance
 

If you are leasing to a reputable company and will drive the truck yourself, they will require Work Comp. If you put a driver in the truck, they require you to get OCC/ACC coverage for your driver.

This is the law in New Hampshire. Unless you are a sub contractor working for a general contractor which your not you don't need it.


Under the New Hampshire Workers' Compensation Law RSA 281-A every employer who has any employees, full or part-time, is required to cover these employees with workers' compensation insurance written by a carrier. It does not matter if they are related, such as daughter, son, husband, etc. It also does not matter if the business is a "Non-Profit" organization.

Sole-proprietors, partners and self-employed persons are not required by law to carry workers' compensation on themselves but may elect to be covered, per RSA 281-A:3. Sole proprietors or partners operating as Sub-Contractors, even those without employees, may be required by a General Contractor to carry workers' compensation coverage as part of their private agreement. If they have coverage at all, a corporation or LLC may elect to exclude up to 3 executive officers, under RSA 281-A

In CA you sign a waiver and not have it if you're a one man operation. If you have any employees then you have to have it.[/quote]

Hmmm always thought thats ONLY if you incorporate or have employees....the poster is brand new to his own authority....so hows he have employees n why the hell would he Inc?
I asked G-man some time ago why would a one man pony show like me incorporate.....what good is it...n couldnt see any value in it?

K////have you signed up with OOIDA?....if not I strongly suggest you do...its really cheap and they have been extremly helpfull and knowledgable to me.
This is a question I would call them about if just you (no Inc)....just running own authority, need a WC policy? (they would know for sure).....be news to me if I needed one here in Cal.......Id tell em screw you n move all my funds immediatly out of state if they ever gave me a hassle.
Yeah lots of guys here in Ca hire people to work DONT here....n are busted for it on a routine basis (picking up day laborers)...we have a HUGE illegally here underground workforce (that the latin caucus here loves to be here). So they talk out of two ends of their mouths n only enforrce it when a worker complains.
So even if they required just me, theyd never get around to just me not covering myself :-p

Pepe - Not sure why they are asking me for Worker's Comp. My insurance agent told me I didn't have to have it. In a previous post - I posted an interpretation of the NC law which I read to mean that I don't have to have it. The only thing I can think is this company doesn't know the law in NC or is extremely afraid of litigation.

Thanks for the suggestion of contacting OOIDA. I will do so tomorrow.

As for the company wanting the WC insurance. Will just not haul for them. Just wanted to make sure I hadn't missed something in my setup.

My state doesn't require workers comp unless you have at least 5 employees. Each state has different laws concerning workers comp. A carrier can make their own rules. If you are leasing to a carrier you may want to check to see if you can get an occupational policy instead. They are really only trying to protect themselves from a claim.

As I read the NC statutes, WC is required if you have a subcontract with a motor carrier (like an o/o lease). It's pretty clear "ghost" and “accidental occupational injury" policies are not acceptable.

If you look at example 8, if you contract directly with the manufacturer (shipper) you wouldn't need WC.

Here's a link to the NC Assigned Risk pool calculator to determine what NC will charge you for WC:

https://www.ncrb.org/ManageAR/StandA...?type=ez_quote
Code for long haul trucking is 7229. I think it's 15% of taxable income the first year.

As GMAN points out, the carrier can require whatever they want in order to work for them as long as it's not legally prohibited (discrimination etc). Even then they might until "called out" on it. If you're looking to lease with a carrier, ask if you can be included on their WC policy. It's usually cheaper. Carriers know they're on the hook if you get hurt and don't have WC while leased to them. BOL.

I was told that North Carolina is the only state in the country that requires workers comp with only one employee. There was a driver that I was going to hire about a year or so ago. I decided against it because I would have had to go to the higher expense of workers comp rather than being able to have the occupational policy. It is my understanding that you don't have to be headquartered in North Carolina for them to force you to carry workers comp. I heard something the other day about New York. According to what I was told that New York now wants any carrier who either picks up or delivers in that state to have workers comp in New York. I was told that they want you to carry it for their state even if you carry it in your home state. :?

And leasing to a motor carrier is the only exception to NC's rule that 3 or less employees don't need WC. Also, say your a motor carrier with HQ in TN and lease an O/O under your authority. He's licensed in GA. The O/O gets hurt while under load for you in NC. NC says the driver's entitled to WC and if he doesn't have his own policy then the carrier is liable.