At Clinard Insurance Group, in Winston Salem, NC , we specialize in helping used car dealers with their dealers insurance policies.   And 95% of the time, when a dealer calls us for insurance, the only policy on his mind is the NC garage insurance policy.  But there is another, very important policy that all dealers must consider.  And leaving this one out can do a lot more than just ruin your day.  It could wipe out your business.

Why so few used car dealers remember to purchase workers compensation insurance is a mystery to me.  It probably stems from the nature of their employees since many hire their salespeople as independent contractors.  But while hiring them as independent contractors may change how taxes are paid, it will not allow the dealer/owner to avoid paying the losses under North Carolina Workers Compensation law.

In NC, purchasing workers compensation insurance is voluntary if you have 3 or fewer employees.  And you don’t have to count your independent contractors as employees either.  But here’s the rub.  Just because you don’t purchase the insurance, doesn’t mean you are safe from the losses.  In fact, not purchasing the insurance policy means you are putting your own assets on the line to pay all claims required by the NC workers compensation statutes.  So, if your employee is injured or killed on the job, then your business will have to pay the statutory benefits required by law.  Essentially, you have chosen to put yourself in the position of the insurance company for all losses.  And a big loss could put most small used car dealers out of business.

Insurance is a good deal for the consumer any time that the consumer can trade a small, affordable, known loss – in this case the workers compensation premium, for a larger, unknown and possibly catastrophic loss.  If you own a used car dealership and you have anyone besides yourself working for you in any capacity at all, you owe it to yourself to get a price on a workers compensation policy.  You may be surprised at how affordable it is.  In this case, going bare is a huge risk.  If you are going to go without insurance, please recognize that you have only chosen to shift the risk of loss to yourself in exchange for not paying an annual workers compensation premium that is probably very affordable for you.

At Clinard Insurance Group in Winston Salem, NC, we want all insurance consumers to be educated consumers.  If you would like help with your dealers insurance, or if you want a workers compensation quote, please call our office, toll free at 877-687-7557 or visit us online at www.clinardinsurance.com.

All building contractors working in North Carolina who carry either a NC general liability insurance policy or a NC workers compensation insurance policy , or both,  probably know that these insurance policies are subject to an annual audit.  What few contractors understand is that they have the power to stack the deck in their favor when it comes to that audit.  And since some of the audit process is subjective, this can mean money in your pocket if you are a building contractor.  Here are 5 tips that will put you on the road to more successful insurance audits.

Let me start by emphasizing that insurance auditors are people just like any other.  If you grease the path for them and make their job easier, then they are much more likely to cut you some slack in the audit process and this can end up saving you a lot of money.  So, what are those 5 tips?

Tip # 1 – Have Those Insurance Certificates Ready.  I just can’t preach this enough.  Do not allow any subcontractors on to your job site until they have provided you with a current certificate of insurance.  And more than that, be sure that the limits on their general liability insurance policy are at least equal to your own policy limits.  And if you have a workers compensation policy, make sure that their certificate shows that they have one as well.  Last of all, check the policy dates on the certificate to be sure that they are current and active.  If any policies will run out while these subs are still on the job, make sure that you also obtain an updated certificate.   Put copies of all of these certs in your audit file.  If the auditor shows up at your office and you don’t have your certs ready, he will charge you for the subcontractor payroll and leave it up to you to fix it later.  And usually, fixing it later takes a lot more of your time. 

Tip #2 – Take Some Time To Study Your Classifications.  First of all, take the time with your agent to understand all of the classifications on your general liability insurance policy and your workers compensation insurance policy.  Make sure that you understand the nuances of each class code and that your policy is set up accurately.  If you are going to fudge the gray area between two similar classifications, understand that you might not get it past the auditor and you should have funds ready should you fail. 

Tip #3  - Have The Audit Done and Ready To Hand Over.  Once you have done your homework on your classifications, set up a spreadsheet to dump the payroll for each employee each week into the correct classification.  You will want to keep a spreadsheet for both the workers compensation and the general liability policies.  If you have done this correctly, you will be able to hand that spreadsheet over to the auditor and essentially all of the auditor’s work is done.  This is more likely to keep them from digging around in your books to find new problems to share with the underwriters that can cost you in increased premiums.

Tip #4  - Keep The Overtime Payroll Separate.  The NC workers compensation insurance policy allows you to avoid paying premiums on the extra overtime pay.  But, to keep from paying work comp rates on this payroll, you must have it segregated.  I suggest that you add a column on the work comp spreadsheet that you are keeping to show the amount of payroll that  is overtime bonus and deduct it from the total payroll for each classification.

Tip #5 -  Always Schedule the Audit for Friday Afternoons.   This one may sound a little goofy but it works.  If the auditor shows up at your office on Friday afternoon, and you can put all the information in his hands with up to date spreadsheets and copies of all subcontractor certificates, then he is more likely to accept your figures and get on home for the weekend.  The less time he spends digging around in your books and your operations, the less likely he is to find a surprise that the underwriter doesn’t like which means higher insurance costs for you.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping all kinds of contractors with their insurance needs, from general liability insurance and workers compensation insurance to commercial auto insurance and equipment insurance.  If you would like help with your commercial insurance program, please feel free to call us, toll free at 877-687-7557 or visit us on the web at www.thecontractorshelper.com.