DO I NEED COMMERCIAL AUTO OR PERSONAL AUTO INSURANCE?

 

As a small business owner, you have a lot on your plate. You're juggling a million things every day, and adding insurance to that list may not be at the top of your priority. But, it's important to understand the difference between Commercial and Personal Auto Insurance policies so you can make the best decision for your business. There are many differences between Commercial and Personal Auto Insurance. For some, it may be clear that they need one or the other type of coverage, but for others who are unsure about their needs, this decision can prove to be difficult. To help you make an informed choice on which type of coverage best suits your situation, we’ve outlined what makes each coverage different. 

What is Personal Auto Insurance?

Personal Auto Insurance is a necessity for most individuals, especially if you own and drive a car. For your business, though, it most likely is not required. Personal Auto policies protect drivers from losses that happen while driving said car for personal reasons. Activities such as: commuting to work or school, going for a road trip, or a simple trip to the grocery store all fall under instances of driving your car for personal reasons. Personal Auto will cover losses incurred during these scenarios. Personal Auto also typically only protects the owner of the car and immediate family.

What is Commercial Auto Insurance?

Commercial Auto Insurance covers vehicles that are primarily used for business. Those who have to: drive to various different job sites, use their vehicle to deliver food or merchandise, rely on vehicles to transport their equipment, etc. all need and benefit from Commercial Auto Insurance. This coverage is not exclusive to certain types of vehicles either. You do not need to own a semi-truck or van to be covered by Commercial Auto Insurance. Any type of vehicle, as long as you use it primarily for business purposes, will be protected. .

What is the Difference Between Commercial and Personal Auto Insurance?

The two coverages are fairly similar and the lines can be blurred when using a personal vehicle for your business, but there is an important difference between Commercial and Personal Auto Insurance.

The main difference is that Personal Auto policies ONLY cover claims related to personal use, whereas Commercial Auto covers claims for vehicles used for commercial use that are owned by the business. Commercial Auto does NOT cover personal cars that are not used for business purposes or owned by the business itself.

If your business uses non-owned vehicles or hired vehicles, then you may add Hired and Non-Owned coverage to your policy.

Am I Required to Carry Commercial Auto Insurance ?

All states other than New Hampshire and Virginia make you carry a Commercial Auto policy for business-owned vehicles. If you personally own a vehicle that you use for your business you may consider buying Commercial Auto Insurance based on how often you use that vehicle. If you mostly use it for personal reasons and for the occasional business errand - then you may be fine without it. But if you are using a personally owned vehicle often for your business as we described above, you should consider a Commercial Auto policy as well. 

Find the Right Coverage for Your Vehicles

It’s important to understand the difference between Commercial Auto Insurance and Personal Auto Insurance. The two are not interchangeable, despite being similar in some ways.

Commercial Auto policies tend to have a higher level of coverage than what is required by law for the insured vehicle(s) to account for the increased risk on behalf of their company or organization that employs them. Personal Auto policyholders do not usually have these same risks, so it may be possible to get cheaper rates with just state-required minimum levels of coverage without having additional protection from other types of losses.

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964

WORK COMP WEDNESDAY - WAIVERS OF SUBROGATION

WHAT IS A WAIVER OF SUBROGATION? 

 A Workers’ Compensation Waiver of Subrogation typically prohibits the insurer from filing a suit against another party in the event of a loss. This waiver is a commonly misunderstood endorsement and is particularly standard in construction contracts. Plus, it is typically required by written contract between contractor and subcontractor. The subcontractor oftentimes purchases the Waiver of Subrogation endorsement to satisfy this contractual requirement.

 Subrogation is the insurance carrier’s right to recover the amount of a claim paid to an injured worker by legally pursuing the third party that caused the loss. By adding a Waiver of Subrogation endorsement, the insured is agreeing to give up the carrier’s right to seek damages from another party. 

THERE ARE TWO TYPES OF WAIVERS OF SUBROGATION: 

BLANKET WAIVERS 

Applies to all operations of the insured and would prohibit the carrier from recovering the money they paid on a claim from any negligent third party. 

Availability: 

The waiver can be included during the quoting process or added midterm with many carriers, though not all will do the latter. For those approved to be added midterm, a no known loss letter may be required by the carrier prior to processing the endorsement. 

SPECIFIC WAIVERS 

Applies only to the person / organization listed on the waiver endorsement. 

In general, the information needed to add a specific waiver is: 

• Name of person / organization • Address of services performed • Job description • Class code associated with this job / project • Payroll associated with this job / project 

WHO NEEDS A WAIVER OF SUBROGATION? 

A general contractor may require this endorsement from their subcontractors to avoid liability of claims that occur while the subcontractor is working for the general contractor. Likewise, an owner / client may require this endorsement from their vendors to avoid liability of claims that occur on their jobsite 

WHY IS A WAIVER OF SUBROGATION NEEDED? 

Owners and general contractors could require Waivers of Subrogation to assist with protecting themselves, with the cost of protection passed to the vendor or subcontractor. 

 Typically, subcontractors need to add a Waiver of Subrogation to satisfy contractual requirements. General liability insurers may look more favorably on companies that obtain waivers from their subcontractors, potentially motivating a general contractor to require this endorsement. Similarly, subcontractors with this endorsement included on their WC policy could be perceived as preferable by the general contractor. 

 The Waiver of Subrogation endorsement does not prohibit the claimant from pursuing legal action against the contractor / owner in the case of negligence leading to injury. It only prohibits the WC carrier. 

PURCHASING A WAIVER OF SUBROGATION: 

PREMIUMS 

The addition of a waiver could expose the subcontractor’s insurance carrier to more risk because they cannot recover damages, therefore there is typically an additional charge to add the waiver endorsement to a policy. The cost for a waiver can vary by type, carrier and state. 

AVAILABILITY 

The waiver can be included during the quoting process or added midterm with many carriers. If it is added midterm, a no known loss letter may be required by the carrier prior to processing the endorsement. 

NEW VENTURES 

Some WC carriers only allow for Specific Waivers of Subrogation during an insured’s first policy year to protect themselves and retain the right to recover from any entity not listed in the Specific Waiver endorsement

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964

Work Comp Wednesday: Calculating Overtime

 

Workers’ Comp Overtime Definition

Overtime means those hours worked for which there is an increase in the rate of pay:

• For work in any day or in any week in excess of the number of hours normally worked, or
• For hours worked in excess of 8 hours in any day or 40 hours in any week, or
• For work on Saturdays, Sundays or holidays.

NOTE: Forms of incentive pay commonly referred to as "shift differential" or "premium pay" associated with working other than normal day shift hours during the standard workweek are not to be considered overtime.

In the case of guaranteed wage agreements, overtime means only those hours worked in excess of the number specified in such agreement.

Exclusion of Overtime Payroll

Exclusion of Overtime Payroll means: The extra pay (that amount over and above the regular straight time pay) for overtime shall be excluded from the payroll on which premium is computed - as shown below - as long as payroll records are kept to show overtime pay separately, by employee and in summary by classification.

• If the records show separately the extra pay earned for overtime, the entire extra pay shall be excluded.
• If the records show the total pay earned for overtime (regular pay plus overtime pay) in one combination amount, 1/3 of this total pay shall be excluded. If double time is paid for overtime and the total pay for such overtime is recorded separately, 1/2 of the total pay for double time shall be excluded.

In simple terms, if you keep adequate records of overtime, you are only required to pay workers' compensation premium on the straight time payrolls. If adequate records are not maintained, the overtime pay cannot be excluded from the total payroll and you must pay on the entire amount.

WORK COMP WEDNESDAY: Do you use Subcontractors that Lease their Employees?

Florida is suffering from a shortage of skilled trades to use for your construction job.  As this shortage continues, subcontractors are having to find different ways to supply employees.  You as the GC should know that there is an exposure to your worker's compensation policy or to your individual pocket if you do not have a worker’s compensation policy.

Your subcontractor is required to provide workers compensation coverage for all workers on your job site.  If a Subcontractor’s worker is injured and not covered under the subcontractor’s work comp, your company will be liable for workers compensation benefits to the injured individual.  This will lead to significantly higher workers comp costs for you as the general contractor. When you accept a work comp certificate from a subcontractor who uses a (PEO Professional Employer Organization, Southeast or Frank Crum as common examples), it only provides coverage to those employees whose payroll is reported and then processed by the PEO.  The problem arises when you do not know if the workers your sub brings on to your job site are covered under his PEO certificate or not.

We recommend you take the following steps to avoid uninsured workers on your job site.

• Determine if the Contractor has leased If you are going to accept a certificate from a leasing company, verify that the Owner is covered for Workers Compensation through the leasing company. You can verify this by requesting a copy of his latest PEO billing statement showing his name included under payroll. If not, make sure that the Owner complies with the exemption requirements of the Florida Statute.

 

• For all Contractors with leased employees, regular contact should be made with the leasing company to determine the identity of the leased employees.   Random checks should be made of those Contractors using leased employees by you or your personnel to determine that the people on the construction site are in fact from the leasing company.  Only those employees leased are covered by the leasing company’s worker’s compensation insurance.  If you find uncovered workers on the site, the Contractor should be immediately dismissed from the worksite.

 

• Have all subcontractors sign the affidavit below representing that all employees on your job sites are covered under their employee leasing workers compensation policy.

Several contractors that I know have been caught under this loophole for the sub.  Claims of $70,000 to several hundred thousand dollars have been claimed against their worker's compensation policies.  Don’t let it be you.  Use the Worker’s Compensation Employee Leasing Affidavit attached to prevent this exposure to your business.

Worker’s Compensation Employee Leasing Affidavit.pdf 

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964

WORK COMP WEDNESDAYS: Four Big Benefits of Workers Compensation Insurance

 While many employers secure workers compensation insurance to satisfy legal requirements, this important safeguard has the power to protect business interests while building a bond of trust and respect with employees.

According to the National Safety Council, accidental injury is the third highest cause of death in the United States. Based on study findings, researchers concluded that someone is injured every second and killed every three minutes. The study also found that job-site deaths increased by 10 percent in 2016.

Now more than ever, it’s important to not only have coverage, but to make sure employees know their rights and responsibilities for a safe workplace.  These are some of the biggest benefits of workers compensation insurance:

1) Comprehensive Coverage

Not having a worker’s compensation policy in place means that you lose the common law defenses available, which are: assumption of risk, contributory negligence, and negligence of a fellow employee.

This insurance provides payment of medical bills and other expenses involved when an employee is injured on the job. It also makes allowances for the collection of lost wages. In the case of fatal injury, funeral expenses and dependent financial support are covered under most policies.

It’s important to note that claims can be made whenever and wherever an employee is hurt while on the job —regardless of the proximity to your office. That includes business trips, conferences, office errands, and other job-related tasks.

Also covered are injuries that occur over time (cumulative) and diseases caused by workplace conditions. Self-inflicted injuries, illegal activity, and employee-initiated violence are not valid workers compensation claims.

2) Involvement in the Process

Ideally, no employee would ever file a false workers compensation claim. Unfortunately, it does happen. This coverage protects you against fraudulent claims and lawsuits, but also allows you to begin the process with a company-trusted physician.

Many employers exercise their right to select a physician for a one-time evaluation. After that, employees can choose to remain with that doctor or choose another specialist. While this provision is in place to discourage fraud, it also avoids the time and confusion of having to start fresh with a new physician for each claim.

Also, the injured employee, generally, cannot sue an employer, for work-related injuries if the employer has purchased workers’ compensation insurance as required by law.

3) Community Stewardship

As a business owner, you want to do right by your team members and customers. While you review the many benefits of workers compensation insurance, it’s also wise to be aware of the consequences associated with not having adequate coverage. This includes:

• non-compliance penalties
• employee lawsuits
• financial repercussions
• reduction in worker morale/increased turnover

Also, you are personally held responsible for the employee’s injuries and lost time from work if there is no workers compensation policy in place. In addition, companies who don’t protect their interests and those of employees soon get a negative reputation, which could affect customer loyalty.

4) Peace of Mind

It is the right thing to do. Having an employee injured in the workplace is a public relations nightmare. The integrity of your company, and you, are put in the spotlight anytime an accident occurs at your workplace. When a team member is hurt, it’s natural to have immediate concerns for their well-being. At the same time, there are legal considerations to protect your business assets. Workers compensation insurance also puts in place protection against fraudulent claims.

Since 1964, we’ve helped countless Florida companies secure the necessary insurance to protect business assets. From workers compensation to business and commercial, construction, risk management, and more, our qualified staff can help you find the best insurance solutions for your business. Contact us today to discuss your workers compensation program!  Just call 321-72-1620 and ask for Elaine.

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964

 

4 Tips for First-Time Home Buyers

 Buying your first home is not only a major investment, it’s a new chapter in your life. You should be proud of yourself for making this life-changing decision. With focus and determination, your home can provide years of service and satisfaction for you and your loved ones.

Whether you’re starting a family, venturing out on your own for the first time, or any other scenario, it’s important to keep in mind valuable advice to make this transition smooth and enjoyable. Here’s how to get started:

1) Pre-Approval and Beginning Stages

You’ve likely heard about the pre-approval process. Essentially, this centers on different loans for which you qualify. Here’s also where you’ll glean details about your ideal down payment, potential credits, and more.

At this stage, you should also start or beef up savings, and/or set aside cash reserves specifically for the purchase and initial maintenance of your new home. While many lenders now require a 20 percent down payment, it’s still possible to find outlets that will accept three percent or less in some situations.

Next, determine whether or not you’ll partner with a real estate agent. This decision is entirely up to your discretion. Some people appreciate the ease and peace of mind that comes from such professionals, while others prefer to approach the home buying process on their own. 

2) Focus on the Details

Regardless of whether you’re working with a REALTOR® or purchasing your home directly from the current owner, you’ll want to be sure there are no surprises. Accomplish that goal by first scheduling a thorough home inspection. It’s also helpful to know the latest property value assessments for other similar homes in the area.

Be sure to get detailed information on any significant upgrades or maintenance made to the property. Avoid late-in-the-game surprises by ensuring you fully understand closing and other costs. Then, speak with a friendly and knowledgeable insurance agent who can help you investigate multi-policy options. You could get big savings by bundling your new homeowner’s insurance with automobile and/or other coverage.

At this point, it’s also wise to research local and state assistance programs. Many cities and states offer valuable incentives to first-time home buyers, which over the long-term could save you money.

3) Be Realistic and Open-Minded

While some people specifically search for a “forever home” they’ll enjoy for a lifetime, many first-time home buyers purchase with the idea of moving in five or ten years. It can be difficult to predict future changes in jobs, family status, and other factors. That’s why it’s important to select a property that matches your current lifestyle preferences and requirements.

In addition, it’s wise to keep in mind that minor cosmetic changes and updates to a property can be affordable and straight-forward. For example, repainting walls from an undesirable color is simple and cost-effective. By contrast, if a home you’re considering requires major upgrades to match your wants and needs, it might be better to find another property.

The bottom line is that no home is perfect. However, there are ways to enhance and protect your investment. That includes flood insurance and other considerations.

4) Get Insurance Coverage

As mentioned, securing comprehensive insurance gives you the coverage and peace of mind that you’re protected under a variety of situations. Along with homeowners insurance, other popular selections include flood insurance, bundled options, and more. Speak with a trusted and reputable agent to learn more about all the choices available to you.

Since 1964, we’ve helped countless Florida residents with all their insurance needs. Both individuals and business owners benefit from our coverage areas. That includes business and commercial, construction insurance, tree care, risk management, homeowners, automobile, insurance and more. Contact us today to learn more about how we can make your life easier, and help keep you, your loved ones, and your property consistently protected.  Just call 321-725-1620 and ask for Bryan.

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964

WORK COMP WEDNESDAY: "Are They an Employee or an Independent Contractor?"

 If it walks like a duck and quacks like a duck, then it probably is a duck.

One of the never-ending discussions for the construction industry in Florida is whether a trade, supplier or independent contractor is an employee. Figuring the answer out will help clear it up to at least murky water.

The state of Florida holds the construction industry up to a different standard than other industries in Florida. Medical, legal, manufacturing, and hospitality businesses are required to implement a workers' compensation policy at their practice when they have four or more full-time or part-time employees, including corporate officers. However, companies in the construction industry must have workers’ compensation insurance once they employ an employee, regardless of full-time or part-time status.

Officers of Florida corporations registered with the Florida Department of State, Division of Corporations, can choose not to be covered under the workers' compensation policy. If your construction company is an LLC, you can show, as proof, a notarized statement of 10% corporate ownership.

"I know. You are a general contractor and you subcontract all your work out to subcontractors."

Are they subcontractors or independent contractors? The general rule is that an individual is considered an independent contractor if the payer has the right to control or direct the result of the work and not what will be done and how it will be done. You are not an independent contractor if you perform services that can be regulated by an employer (what will be done and how it will be done). This applies even if you are given freedom of action.

Therefore, the question to ask is, "Does the employer have the legal right to control the details of how the services are performed?" If the answer is yes, then they're not an independent contractor. 

For a simple risk management tool, make sure your subcontractor's (independent contractor) agent sends you a certificate of insurance that shows they have their own workers' compensation. If they say they are a small contractor with no employees but themselves, make sure they give you a copy of their exemption. You should require them to sign an independent contractor affidavit. But beware, carriers are now no longer considering that your subcontractor can earn more than $100,000 by himself. Workers’ compensation carriers are starting to examine those 1099's carefully and may assume there are unreported employees helping your subcontractor.

Below is an excerpt from a carrier's letter, explaining how they will decide.

"Exempt contractors with compensation over $100K during a policy period, must either furnish a WC certificate of insurance or verification of any labor materials used by the exempt contractor for consideration. Failure to provide this information could result in a portion of the contractor's distributions being included in the final audit for the general contractor."

If you have any questions, please feel free to contact us at 321-725-1620 and ask for our Work Comp expert, Elaine. We would be glad to help you review your risk management program and make suggestions!

Contact us for all your Insurance needs! (321)725-1620 

Bob Lancaster Insurance

                                                     Serving Florida since 1964