Contractors – What Mistakes to Avoid When Buying Workers’ Compensation Insurance

When buying workers’ compensation insurance as a contractor in New York, it’s crucial to avoid common mistakes to ensure compliance, adequate coverage, and cost-effectiveness. Here are key pitfalls to avoid:

1. **Underestimating Payroll**:

  – **Issue**: Underreporting payroll to lower premiums can lead to audits and significant retroactive charges.

  – **Solution**: Accurately estimate payroll, including all wages, bonuses, and benefits.

2. **Misclassifying Employees**:

  – **Issue**: Misclassifying employees as independent contractors or using incorrect job classifications to reduce premiums can result in penalties.

  – **Solution**: Properly classify all workers according to their actual job functions and roles.

3. **Neglecting Safety Programs**:

  – **Issue**: Ignoring workplace safety can increase the frequency of claims, leading to higher premiums.

  – **Solution**: Implement robust safety programs and training to reduce workplace injuries and claims.

4. **Overlooking Experience Modification Rate (EMR)**:

  – **Issue**: Failing to manage your EMR, which reflects your company’s claim history, can result in higher premiums.

  – **Solution**: Focus on minimizing claims and improving safety to lower your EMR over time.

5. **Ignoring State Requirements**:

  – **Issue**: Non-compliance with New York State Workers’ Compensation Board regulations can lead to fines and business shutdowns.

  – **Solution**: Stay informed about state requirements and ensure your coverage meets all legal mandates.

6. **Choosing the Wrong Insurance Provider**:

  – **Issue**: Selecting an insurer based solely on price without considering their reliability, customer service, or claims handling.

  – **Solution**: Research and choose a reputable insurance provider with a good track record in workers’ compensation.

7. **Not Reviewing Policies Annually**:

  – **Issue**: Failing to review and update your policy annually can result in inadequate coverage or missed opportunities for premium savings.

  – **Solution**: Conduct an annual review of your policy with your insurance agent to adjust coverage as needed.

8. **Ignoring Subcontractor Coverage**:

  – **Issue**: Assuming subcontractors are covered by their own insurance can leave you liable for their injuries if they are not adequately insured.

  – **Solution**: Verify that all subcontractors have valid workers’ compensation coverage and obtain certificates of insurance.

9. **Failing to Educate Employees**:

  – **Issue**: Employees unaware of workers’ compensation procedures can lead to delayed or mishandled claims.

  – **Solution**: Educate employees on how to report injuries and the benefits provided by workers’ compensation.

10. **Not Using a Broker**:

    – **Issue**: Navigating the complexities of workers’ compensation insurance alone can result in missed savings or coverage gaps.

    – **Solution**: Use an experienced insurance broker who specializes in workers’ compensation to help find the best policy for your needs.

By avoiding these mistakes, New York contractors can secure the right workers’ compensation insurance, ensuring legal compliance and protection for their business and employees.

BGES Group is one of New York, New Jersey, and Connecticut’s Construction Insurance Specialists representing 50+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders’ risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health.  Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges.

BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help!  We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, logistics companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner.  We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too. 

If you would like to speak with us, call Gary Wallach at 914-806-5853, click here to email, or click here to visit our website.

Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538



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