Hi:
I briefly read through the post to see if any of them could answer my question. However, as you well know they’re lots of post.
With that said, here goes my question(s):
I have an LLC that has been setup for Realestate (buying, selling, rehabbing, etc…) I’m looking to take my business in the direction of Federal Government remodeling. Meaning remodeling breakrooms, kitchens, bathrooms, etc…located in Federal govt. buildings.
What I need is to know how, how much, and who provides insurance for me and my sub-contractor’s? I read in one of the threads that my sub-contractors should have their own insurance. However, in this instance that is not the case. Would having insurance for the company cover my sub-contractors? Or would that even be advisable?
Thanks in advance
dlmcgill
Hi,
First thing you will be required to obtain a general contractors license in the state or states you intend to do business in.
Generally speaking you will need a Liability Insurance Policy with a minimum of $1m per occurance with a gross aggregate of $1m. Your bidding package for Federal Public Works Projects will highlight the Federal Requirement.
(Which may actually be different project to project depending on the department preparing scopes and letting projects out to bid.)
Most General Contractors are doing $1m per occurance with a $2m or $3m gross aggregate. (If you are doing projects in multiple states you can get a policy which will cover you in the multiple states you operate in.
In order to do a Federal Project your sub-contractors will be required to have there own license and insurance, if not then they are considered employees and paid on your payroll.
You will have to furnish the Federal Goverment Project Coordinator a list of sub’s and proof of insurance when you bid the project. (This is called naming sub’s at notification you are low bidder.)
Your Workers Comp covers your employees and your Liability insurance covers the project. If a Government Agency requires a Bond you will have to pre-qualify for this and have your paper work in order at the time of your bid.
You can get this insurance through a Insurance Broker in your area. Cost is based on your gross income so start insurance with a minimal goal say $250k or $500k so as not to make your start up cost’s to high, your premium will be adjusted at your quarterly audit by the insurance company.
Good Luck,
GR
Hi Gold River. This is very good information. I’m not sure what the statement below means though:
“Most General Contractors are doing $1m per occurance with a $2m or $3m gross aggregate. (If you are doing projects in multiple states you can get a policy which will cover you in the multiple states you operate in.”
What is meant by $1 million per occurance?
Thanks again for the info.
dlmcgill
The term $1m per occurance means the insurance policy will pay up to “One Million Dollars” per settlement, the aggregate amount means the insurance company will pay up to “Two Million or Three Million” for total liability for the policy. (Multiple Settlements.)
If you buy a straight liability policy it only covers you for business in one state (The one you buy the insurance in) so if you want a “Multiple State Policy” you have to ask for it, and find a broker who can write it and handle it.
Hi Gold River:
Thanks for the explanation. How much should I look to shovel out annually for General Contractor Liability insurance?
Here’s a little background. My company has been in existance for about 6 years. Started as a rehabber and now i’m looking to branch out into Commercial Contracts (remodeling existing rooms). I plan to have about 5 employees and estimate earning a minimum of 20k for the rest of 2009. That’s the total of at least 3 jobs, each job estimated between 5k and 7k. I’m not sure if I will use all 5 employees. If these 3 jobs are the only work that will come this year, then I’ll only use 2 employees.
dlmcgill
I would estimate somewhere between $500 and $1,200 for this year depending on the company and the known risk factors for your state.
Cool beans. Thanks again.
dlmcgill