Top Answer
User Avatar
Wiki User
Answered 2014-04-13 18:30:01
Contractors General Liability InsurancePremium for a general contractor can be based on one or a combination of two things, either your gross receipts and or your payroll and cost of subcontractors. Each company has it's own rating methodology so it depends on which market is quoting for you.

As far as the distinction for subcontractors costs, i.e. materials vs labor, I have always had my clients rated off of their subcontractors labor payroll. If your subcontractors do not have there own liability insurance this will be picked up at your year end audit and you will pay a significantly higher premium for them than you would have had they carried their own insurance.

Various CGL premium rating methodsThe insurance company that I've had experience with charges for both: 1) payroll of employees, and 1) Total Cost of sub-contracted work, if any.

But keep in mind that the "rate" charged per $1,000 of either the employee payroll or Sub-Contracted Total Cost is vastly different.

For example, suppose you are a General Contractor with employed carpenters. Your rate per $1,000 of payroll may be $39.45, but your rate for the Total Cost of sub-contractors is only $0.58 per $1,000.

There may be differences, but I think that industry wide employees are based on Payroll and sub-contracted work is based on Total Cost, BUT this assumes that you've done a proper job of documenting that the subs are truly sub-contractors, e.g. certificates of insurance for both General Liability and Workers' Compensation. Because lacking documentation will result in the Total Cost of sub-contracted work to be picked up and charged for as employees. Thus an unexpected large audit billing for the prior term insurance policy.

User Avatar

Your Answer

Still Have Questions?

Related Questions

Can you take out liability insurance per job?

Traditionally, per project general liability policies were reserved for large projects such as tract home and condo developments. Minim premiums on such policies can vary from $50,000 to $250,000. However, there are some new insurance programs out there for smaller contractors with premiums as low as $300 per job.

What are the drawbacks of a Home Owners Association dropping liability insurance?

Without liability insurance, should there be any accident on the property, the association will be liable to pay for defending the claim, and potentially the claim for damages.Often the trade-off between liability insurance premiums and the hourly rate for defense attorneys indicate the it's less expensive to pay the liability insurance premiums.Your governing documents will help you define your requirement as an association insofar as carrying liability insurance is concerned. Usually, carrying it is mandatory.

Can your insurance premiums be raised in a tort liability system if you are not at fault?

Doubt it. Contact policy services for your company, or your states dept. of insurance.

Is insurance premiums for fire insurance an example of variable cost?

is insurance premiums for fire insurance an example of variable cost?

How much does an employer pay the government for a 1099 on wages paid a 1099 employee?

None. The employer does not have to pay the half of the Social Security Tax or Medicare Tax that they would if you were an employee. The normally also get out of paying Unemployment Taxes, Retirement Benefits, Medical Insurance, and General Liability and Worker's Compensation Insurance Premiums. The IRS is really cracking down on employers who try to call their employees subcontractors.

Is there any life insurance that has single digit premiums?

Life insurance premiums vary by policy. There are few that offer single digit premiums.

What are the differences between liability rates between different auto insurance companies?

There are too many differences to answer that question. To many variables that affect premiums.

Can you deduct group insurance premiums on taxes?

Depends on how you paid the premiums. If you paid the premiums on a pretax basis, then you cannot declare the premiums. Many COBRA payments, retiree insurance payments and so on can be deducted.

Where can I find information on life insurance premiums?

You can find information of life insurance premiums, and what their purposes are by asking your current insurance company provider for information on it.

Do Mortgage insurance premiums payments have be escrowed by the lender?

Yes, Mortgage Insurance Premiums Payments do have to be es-crowed by the lender.

How do the premiums for The Hartford insurance compare to premiums for other providers?

Buying insurance can be a stressful activity. Comparing premiums is a great start to finding what is the righ company for you. The Hartford has much higher premiums compared to both State Farm and AAA. This is based on car insurance figures.

How can you get inexpensive general liability insurance for a new General Cont Company that is less than a year old?

General Liability insurnace for a General Contractor is not inexpensive. Many companies have minimum premiums starting at 5k. If you are doing new residential construction the lowest premium I've seen is 25k. It would be in your best interest to contact a local Insurance Broker who specializes in Contractors. They'll have a more comprehensive market and be able to offer you the best quotes. There certainly are few policies that would fall in the inexpensive category but by working wtih an agent who specializes in this field you can certainly get better rates. Premiums start at around $8,000/yr.

What are the premiums for variable universal life insurance?

The premiums will vary depending on your age and other factors. I would speak with an insurance professional.

How much is truck driving insurance?

If you are asking about insurance for driving a commerical truck like a Freightliner, for example: The limit of liability insurance typically required is $1,000,000. If you have a perfect driving record, expect this liability insurance to cost in the range of $700 per month. If you have one speeding ticket, for example, expect this to cost in the range of $900-$1000 per month. Premiums will be higher in some states.

What is product liability policy cost based on?

Product liability insurance premiums are based on the type of product you sell as well as the size of your business/the number of products you sell. Consider that the higher the risk of the product you sell, the higher the insurance cost. Selling key-chains as an example, would generate a lower product liability rate, than say selling guns.

Can health insurance premiums be deducted from your health savings account?

The premiums you pay for your health insurance are qulified medical expenses. Source: IRS.Gov

Universal life insurance premiums tax deductible?

NO. Life insurance premiums would NOT be deductible on your 1040 federal income tax return.

Do fixed car insurance premiums ever increase?

If you were involved in an accident that was your fault, regardless of the terms of your insurance, your premiums will go up. You insurance agent can give you more details.

What is insurance primium calculator?

Insurance premium calculator allows you to calculate how much insurance premiums you'll be paying when you take up a policy. It provide the benefit for the customer to calculate insurance premiums online.

Why does the insurance company get paid back the money Isn't that why we pay our premiums?

You pay premiums because insurance companies are a business and they are there to make a profit. Also, the premiums you pay go into a pool of money so the insurance company can pay out claims when necessary.

How can you lower your cost of auto insurance?

There are many ways to lower your auto insurance premiums depending on your lifestyle and your driving record. For starters, it is always important to review your policy renewal for accuracy. Insurance providers will rate your premiums based on your annual mileage, whether or not you commute, the safety features of your vehicle, the zip code where your vehicle is parked, anti-theft devices, and more. If any of these areas are inaccurate, you could significantly reduce your premiums. If all of your information is up to date and your premiums are still high, you will need to review your coverage to lower your premiums. While it is never recommended to reduce liability coverages unless you cannot afford to keep your auto insurance, this is an option and is better than driving without insurance all together. You can also review your comprehensive and collision deductibles. If they are low, you can reduce your premiums by raising your deductibles.

Is buy sell agreement disability income insurance premiums tax deductible?

No. Also, it is probably not a good idea to try and deduct the premiums for diability or life insurance because if you deduct the premiums or if the employer pays the premiums then any benefits are then taxable. You certainly would not want to have to pay income tax on a large life insurance benefit just because you wanted to deduct a few hundred dollars of insurance premiums.

Your car was stolen with only liability insurance will the insurance pay?

No,, Liability insurance is the minimum financial responsibility requirement in most states. Liability only is the cheapest way to go on your premiums but it only covers damage we do to another person or vehicle.In order to cover a stolen vehicle you would have needed to purchase comprehensive coverage on your vehicle policy.

Still have questions?

Trending Questions
What are fat burning foods? Asked By Wiki User
What is half of 16? Asked By Wiki User
Do potatoes have genders? Asked By Wiki User
Unanswered Questions