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  • Burlington Business Information on Workers Compensation Insurance

Burlington Business Information on Workers Compensation Insurance

Workers compensation insurance helps to protect businesses in Burlington, VT from covered claims arising from work-related injuries, something that your basic business insurance may not do. While coverage is often restricted to employees, it sometimes must be extended to subcontractors. If your business has workers compensation coverage for subcontractors, you’ll need itemized invoices to determine what premiums you should be paying for this coverage. Without itemized invoices, you may end up overpaying for this coverage -- and possibly by a lot.
Workers Compensation Insurance Burlington

Business Owners in Burlington: Get Itemized Invoices for Workers Compensation Insurance

Some Businesses Need Coverage for Subcontractors

Determining whether your business needs workers compensation insurance for subcontractors can be an involved process. Not all businesses in Vermont need coverage for subcontractors, and those that do may only need it for some subcontractors and not others.

To determine if you need a workers comp policy that will cover subcontractors, you should talk with an independent insurance agent who serves Burlington. They should be able to review how your business uses subcontractors and help you determine if any of them need to be covered.

Workers Compensation Insurance Premiums Are Calculated on Labor

Because workers comp coverage is designed to provide coverage for people while they’re working, a policy’s premiums are usually based on the labor being done. When underwriting a policy, an insurer may take into account the kind of work being done, hours employees are working, and number of employees, among other factors.

When covering subcontractors, insurers often also take into account the amount billed for labor. After all, if a subcontractor files a claim, they’ll want the insurance company to reimburse them for all or part of their income, which comes from the amount they bill.

If a subcontractor doesn’t separate out labor and material costs on their invoices, an insurer has no way of knowing how much of what’s billed is for labor. To be safe, the insurer may assume the entire amount billed is for labor and base your premiums on that figure -- even if it includes material costs.

In some cases, this can result in significantly higher premiums than you should be paying. For example, assume you subcontract $20,000 worth of work out, half of which goes to labor and half of which goes to material costs. If your subcontractor doesn’t give you an itemized invoice, your workers comp coverage for this subcontractor may be based on $20,000 worth of work, rather than the $10,000 you pay for labor. In this case, they could be twice as high as they should be.

Work with a Burlington, VT Agent and Get Itemized Invoices

If your business needs workers compensation coverage for subcontractors, there are two things you can do to ensure you don’t pay more than you should for this insurance. First, work with a Burlington-based agent who is familiar with the intricacies of workers compensation insurance. They’ll be able to tell you precisely what details your subcontractors’ invoices should include. Second, ask for itemized invoices from every subcontractor you use, and make sure they have all the details your insurance agent mentioned. As long as they do, you should be able to hand them to your agent, and they’ll ensure your premiums are properly calculated.

 

Get in touch with a business specialist!

 

 

This material is for informational purposes only. All statements herein are subject to the provision, exclusions and conditions of the applicable policy. For an actual description of all coverages, terms and conditions, refer to the insurance policy.

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