1. What type of insurance is needed for a small business to subcontract on commercial jobs?
Usually, subcontractors are required to have a general liability limit of $1,000,000 with an annual aggregate limit of $2,000,000 and workers compensation insurance, if the subcontractor has employees. Individual subcontractors who work alone are eligible for workers compensation if they are a corporation. If they are organized as a partnership or trade as a sole proprietor, they are not eligible for workers compensation insurance. Individual contractors who have general liability insurance but are not eligible for workers compensation insurance present a problem for the General Contractor since their cost must be included as wages paid under the General Contractor’s workers compensation policy.2. Does the homeowners policy cover us if we move out of our house and decide to rent it to another family?
The homeowners policy form and premium assume that the house is occupied by the owner(s) and their family. Once the property becomes a rental dwelling, it is necessary to obtain a “Dwelling” policy which contains coverage and pricing that is tailored to the rental property exposure. If the property continues to be insured on a homeowners policy but has been rented, there is a risk that any claims that occur during the rental may not be covered.3. How do claims effect pricing on commercial insurance policies?
Unlike claims that occur on a homeowners policy or a personal auto policy, there is not an immediate and prescribed percentage increase in premium increase following a claim. Instead, commercial lines underwriters review factors such as length of time with the carrier, profitability of the account over time, agent’s input regarding risk management activity with the insured, whether the claim is due to inattentive loss control or chance, frequency of past claims and similar factors to determine whether an increase in premium is warranted.

4. Workers compensation audits always result in unplanned business expenses and drain current operating capital. How can we be prepared ahead of time so we avoid the surprise?
One of the most frequent surprises during a workers compensation audit is learning that the cost of independent contractors who are not on the payroll will be included as ordinary payroll if they have not provided a certificate of insurance showing that they have workers compensation insurance. Most unexpected increases in the cost of workers compensation at audit result from uninsured independent contractors. One strategy for making sure that independent contractors’ or subcontractors’ files contain certificates of insurance is to include insurance verification in contracts, send notices requesting the certificates and then not releasing checks until certificates are provided. If the contractor is ineligible for workers compensation insurance, then you will be aware to expect that that contractors cost will be payroll and you can plan for the expense.

5. I understand it is always better to place your personal auto and homeowners insurance with the same insurance company in order to get the companion policy discount.
Not necessarily. Most carriers offer a 10% or 15% combined discount. Often, there is a small mutual company that may have a very competitively priced homeowners policy but not write auto insurance. When the mutual homeowners policy is combined with the auto, it is often less than the homeowners/auto combination with the same carrier.

Contact Info

Davis-Trachtenberg, Inc.
15 Garrett Avenue
Rosemont PA 19010
484 386 6050 – phone
484 386 6070 - fax
email. info@davistrach.com