Exorbitant Cost of Health Insurance for the self Employed

Insurance that a handyman or contractor needs depends on number of employees, type of work and locations of operation. In Missouri (USA), there is LIABILITY, WORKMANS’ COMPENSATION, BOND, AND BUSINESS AUTO Insurances.

Most of these types of insurance are straight forward.
LIABILITY covers the contractor when the homeowner or someone in that capacity tries to sue for damages of some sort.

PERFORMANCE BOND is a written by an insurance company. Some employers of construction people and companies will require this if one wants to work for them. It is to guarantee a satisfactory completion of a project or job that a contractor starts. If the contractor fails to finish the job, the client is then compensated for any amount of loss, up to the amount of the performance bond. Ours cost us $100 for a year.

BUSINESS AUTO is insurance on your vehicle used for business. Coverage for tools and other equipment is sometimes separate and requires an itemized list.

WORKMANS’ COMP is a tricky kind of insurance. In Missouri, if a company has one or more employees, then they are required to have it. If one is a subcontractor, the general contractor or employer (same meaning) can require that one have it. This is the one kind of insurance a contractor needs the most whether they have employees or not.

This type of insurance can be done directly with an insurance carrier or through an employer and may differ by state. However, one should look for a MEM company. The rate quote sheet will have this acronym on it.

The tricky part is the terminology of who is the employer. We thought we were independent/ general contractors. We do repair and warrantee work on modular homes and work for home dealers and manufacturers. Those work relationships make us subcontractors even when we do the entire repair job that involves all aspects of the work. We do plumbing, drywall, carpet, lino, tile, cabinets, siding, roofing, set-up, tear-down, etc.

This is an added expense that often requires 25% of the workmans’ comp premium to be paid up front to start it. And even if you qualify right across the board as the general contractor or employer, the final judgment in a dispute rests with a judge who only handles workmans’ comp issues. And, they have a lot of power to do whatever they want.

To find out more about workman’s comp, please see the department of labor website for your state. A book called Black’s Law dictionary is also very useful.

Here are some sites that may be useful (some are for missouri):