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When you own a business, there may be times when you must hire subcontractors. Along with going through the contracting process and making sure that the work is done, you also have to protect yourself and your company.
This is where a master subcontract agreement comes in.
If you are wondering about master subcontract agreements, this article should help fill in the blanks and give you more confidence on drawing up your own when the time comes.
There are many instances when a business will need a subcontractor. For example, Company A has a small business that fixes computers on-site and in some cases, at the customer’s home. Company A hires a subcontractor to do the work at the customer’s home when that need arises.
Another example is a web designer who hires a subcontractor as the programmer or graphic designer for the design process and then does the programming themselves.
In both cases, there has to be a contract in place to protect Company A, and this is where a master subcontract agreement comes into place.
There are three major components that are included in a master subcontract agreement. However, these are the bare minimum. They include:
Next, you need to ensure that the entirety of the work is described in detail. This scope of the work should include expectations of the subcontractor—precision here is a key element. For example, if you have promised a specific rate of pay that is hourly, a logged detail of this is integral to your contract promise.
While you cannot always remember every single detail, it’s better to have too many details rather than miss something important. This does not mean you have to weigh down the contract with legalese; it simply means to cover all of your bases, even if it’s in layman’s terms.
Here are a few must-have items on your master subcontract agreements:
There are a few things to keep in mind that may not come up but should be addressed if applicable.
Make sure that you have insurance that covers a subcontractor. If not, some subcontractors carry their own in the form of general liability insurance. However, if they notify you that they are adding you as an additional insured, be sure to get proof of the certificate of insurance, not just their word. You want to make sure you are protected—either through your own insurance or theirs—with proof.
Another area to address is the subcontractor further subcontracting work out. If this is something you do not approve of happening, be sure to put that clause into your master subcontract agreement so it doesn’t become an issue in the future.
Master subcontract agreements do not have to be confusing or complicated. If you have questions about them or about making sure you have your own proper insurance coverage, we can help answer your questions. Simply contact us and we’ll be more than happy to help.
There isn’t any question that the cost of small business insurance is a major challenge when you have to stay within strict budget guidelines. The problem is you likely won’t really know off the bat what you’ll need to pay for various types of insurance to protect your small business. There isn’t any definite way to know since all premiums and policies differ depending on the type of coverage you need.
What you can do is find ways to save as much as you can by taking some basic steps into consideration. While it’s usually impossible to control the cost of premiums, you can at least reduce total cost of all policies by taking some smart actions.
On average, you may need several different insurance policies to keep yourself and your company completely protected. However, some of these get consolidated into a bundle, though it depends on what specialized protection you need due to various circumstances.
Let’s look at the types of insurance you need, how much it costs, and methods to cut costs.
You can’t do without general liability insurance, regardless of whether you run a small or large company. It helps protect you against any risks to your financial welfare. But it all depends on how many risks your small business actually has. You may think you have few risks just because you have small infrastructure—this isn’t always the case.
In reality, you may have more risks than you think based on the nature of what you do. With this in mind, your liability insurance cost could vary from a small $500 per year to maybe several thousand dollars a year based on your audited liabilities.
A liability variation some small businesses use is errors and omissions insurance to protect against human error. Some small companies offer advice and consultation, and this helps protect you against a lawsuit if someone thinks you were in the wrong.
The aforementioned insurance usually falls in the same price brackets based on how high your risks are.
You have the same situation with commercial property insurance since it all depends on the size of your building and the risks within. You can run a small business and perhaps operate a large facility that poses more risks than you initially realized.
If you’re working out of your home, you’d only have to get a homeowner’s policy to protect your property. In a situation where you’re just a sole proprietor, policies like workers’ comp insurance isn’t even necessary. Even commercial auto insurance is perhaps unnecessary if you don’t use any cars to conduct business.
What is becoming more necessary is insurance for security breaches in a time when cyber threats keep increasing. A data breach could easily bankrupt your small business without protection, so it’s worth looking into what’s called cyber liability insurance. Sometimes you can get this covered through umbrella insurance policies.
As mentioned above, bundling is one good way to cut down on costs when you need multiple insurances. Doing this makes renewing insurance easier rather than paying extra fees each year.
Talk to your insurance company about raising your deductibles as well, which frequently lowers premiums. An insurance agent can additionally review all of your insurance policies once a year and see which ones you may no longer need.
Simply reducing risk in your small business generally lowers premiums anyway. Visit the U.S. Small Business Administration website to help give you tips on how to better manage your risks. Additionally, you can contact us here at InsureYourCompany.com so we can help you make the right decisions in insurance and other documentation to help your business succeed.
Since workers’ compensation insurance is required in most states, it’s no surprise that many business owners feel the need to learn as much as they can about it before settling on a policy. After all, without the proper coverage, the penalties and fees one’s company could face are quite exorbitant.
But selecting the right insurance of any kind often becomes as much of a question about finances as it is about good coverage. For small businesses especially, the cost of insurance must be taken into consideration—after all, what good is insuring a bankrupt company?
Luckily, there is some flexibility when it comes to workers’ compensation premiums, as the cost is often determined based off of a number of different factors.
So, how are these premiums determined?
The first factor in determining workers’ compensation premiums is based on actual payroll data. Each state has a distinct manual with their own class codes. These class codes are for each job duty within a business and each industry that makes up the business. Employees are classified, but businesses do not classify all employees the same.
For instance, a construction company would typically have construction workers, management, and administrative employees—just to name a few.
The premium rate is calculated at per $100 dollars of payroll and is based on each class code.
There are three factors determining the premiums for workers’ compensation which include:
Workers’ compensation insurance carriers create a base rate for each class code using the same rating manuals. The base rates are originally filed with that same department, but these base rates cannot be increased or decreased without approval by the Department of Insurance in that state.
The base rate is determined first, followed by each insurance company deciding on the experience modification factor. This is distinctive to the employer and the percentage is calculated based on the following factor called a loss factor. The loss factor is calculated each year and shows whether an employer has a higher or lower rate of loss history than other companies in the same industry. This also helps determine the premiums.
For example, a company with an experience mod factor of 90 could see a 10% savings, whereas one with 100 will more than likely be calculated at the base rate. Of course, those employers with higher than 100 will see a larger premium that is based on the number above the 100.
Surcharges and state assessments differ for each state and can be included in the premiums. Some of these fees include items such as anti-fraud surcharges and carrier insolvency.
Each state will have their own rules. According to Insurance Journal, “New Jersey law mandates application of separate policyholder surcharges to finance the Second Injury Fund and Uninsured Employers’ Fund.”
The Estimated Annual Premium, or EAP, is calculated and quoted, but instances arise where there may be an overpayment or an underpayment. A yearly audit is done and the company will either receive a refund or receive credit.
In cases where payroll was unreported, an additional premium may be required. This is why it is vital to report everything to the best of your ability so you are not hit with a payment(s) that the company is not expecting.
Keep in mind that you are allowed to choose a pay-as-you-go program where the workers’ compensation premiums are deducted each payroll period. Simply choose a payroll provider that offers this option so your company does not have a large premium at an annual rate. This makes it easier for some companies although it may require more bookkeeping.
Being healthy at work not only increases employees’ moods and reduces health risks, it also has been shown to make employees more productive.
At InsureYourCompany.com, one of our goals is staying healthy and active. We enjoy “getting out of the box” and taking a break from our offices and cubicles to participate in daily exercise time. We participate in fit activities during our lunch breaks and other designated times, allowing our employees to partake in cardio, weightlifting, or stretching activities.
We would like to share some of the ways we are keeping our employees active, healthy, happy, and productive.
Here at InsureYourCompany.com, we have daily exercise routines that inspire and keep us active. One of these daily rituals includes planking every day at 11am and 2:30pm. This time provides a wonderful break from computers and phones to increase the heart rate and feel the burn.
Little activities like that remind us that our health is so important, and taking time away from the grind can not only keep us healthy but also makes work more productive. Planking is a great office exercise.
You don’t need much room to plank. It is also great for the whole body, engaging the core, arms, back, and legs. It makes you get out of your chair and on the ground, which you wouldn’t normally do, adding a great break and perspective to the office.
Some employees utilize their time wisely with exercise during their lunch break. For example, we have employees who walk across the street to the local gym to get a cardio workout or get in some weight training. All of these small factors add up when it comes time to racing or competing in different sports. For example, many of our employees participate in sporting events after work including softball, running, martial arts (jiu jitsu), biking, cross fit, and volleyball.
Along with the activities staff members are doing outside of work, some are exercising as a means of transportation. Some co-workers live within a 5- to 10-mile radius of our office and are able to bike to work. Aside from being “green” and helping the environment by reducing CO2 emissions, it’s also a great full body workout!
Starting a company team for a local charity race is a great way to build up office morale and health. These races are fun and for a good cause. Creating a team holds everyone accountable and creates a fun and energetic atmosphere.
This year, our company participated in the STOMP The Monster Marlboro 5K. As their website says, STOMP The Monster™ provides financial and other support to cancer patients, their families, and caregivers when they need it most—during their fight with the disease. They promote a healthy lifestyle with proper diet and exercise, leading by example, and provide funding for potential advances in prevention and treatment.
Having an event to train for gives people more motivation to get out there and maintain an active lifestyle, especially knowing that it’s for a good cause.
Many companies take healthy initiatives to the next level with calorie trackers, pedometers, and doctors’ visits to keep track and motivate employees to take control of their health. There are various incentives, one being receiving money back for good results.
InsureYourCompany.com cares about the well-being of its employees and wants them to remain happy and healthy while working to insure businesses and provide healthcare options for companies across the nation. As seen with the plethora of examples above, IYC takes health seriously. With new ways of incorporating activities happening each year, who knows what the future will hold for IYC—but we know it will be a healthy one!
When running a business, tax deductions are helpful to defray some of the costs involved with keeping your business profitable. One of the more common questions that tends to come up is: “Is business insurance tax-deductible?”
Here is some helpful information on what is deductible when it comes to business insurance, and what generally accepted premium deductions are included—and those that are not.
When it comes to insurance deductions, there are two general rules:
There are a few circumstances where business insurance is not considered deductible, which include, but are not limited to:
The good news is that there are plenty of insurances that are tax-deductible according to the Internal Revenue Service. Here are a few of the specific situations and types of insurances that are deductible to businesses:
In any of these business tax deduction scenarios, there are always exclusions, exceptions, and certain specifics that you must follow as a business owner. However, a majority of insurance premiums are fortunately considered the cost of doing business and are tax-deductible, which can save the company quite a bit of money each year.
If you want to learn more about business insurance tax deductions or how we can help you save money on expenses when it comes to business insurance in general, feel free to contact us.
The Affordable Care Act (ACA) has had a huge impact on all businesses and enabled many people to obtain health insurance, yet it’s also proven to be a major headache for those still growing in the business world. With the newly enacted rules, smaller businesses are under more pressure to stay compliant and avoid costly penalties.
Those penalties continue to rise, placing small business owners in complex predicaments related to hiring and keeping up with the law.
While the small business community always has challenges, this adds a new layer that could become costly without education and help. If you’re a small business owner, it’s important to keep up with recent requirements as well as what may happen in the future.
It is understandable that you cannot keep up with the continuous changes with ACA. However, you have some options available to help you get through this confusion. Because in the end, the ACA can still help you and your employees obtain more affordable insurance without causing disruptions.
When the ACA first became law, small businesses resented mandates that would require owners to offer insurance to employees. Last year, all small businesses with 100 or more employees received the new mandate to buy into health insurance. Once this went into effect, it made employers bear some of the provider costs, which created a cause for concern regarding a declining bottom line.
Small businesses with 50 to 99 employees had an extra year to prepare for an identical mandate, which came into fruition this past January. For these businesses, it has become an even more significant hardship since fines are quite steep. If you don’t adhere to the new rules, penalties are $2,000 per employee, bringing potential financial fallout when you multiply that by 50 or 99.
Right now, small businesses with 50 or fewer employees are exempt from this, though ACA changes are still affecting how they run things. All small businesses have taken on different hiring procedures as a result.
Reports are that all small businesses have begun to cut more full-time employees in favor of part-timers or freelancers. Business owners do this to help cover the costs of having to buy into insurance. Even so, nobody knows if this is a short trend or permanent trend for how small business will hire in the future.
Debates never end about the value of the ACA, yet take a look at a few ways to keep yourself compliant without complications.
Many automated employee management systems let you track employee data so you don’t lose sight of what’s occurring with payroll and employment benefits. By keeping track of these, you’ll see whether your employees really work full-time and have eligibility for health insurance.
Plus, you can check if any employer-sponsored health plans are affordable based on what the salary is of every employee. Using an automated system eliminates the numerous hours you’d have to put in to keep track of employee financial data.
All chambers of commerce work closely with local businesses to help guide them through the biggest regulation challenges. When you link up with yours, you can get some expert guidance on what steps to take to stay compliant with the ACA. They usually have a vast database of resources to expand your networking horizons for gaining the best advice and support.
Of course, if you’re prepared to take providing your employees with coverage with a great group health insurance policy into your own hands, you can request a quote from InsureYourCompany.com today.
It’s rare that a business works alone without the help of another business. It doesn’t matter what type of business it is because many scenarios call for an insured endorsement on a certificate of insurance.
For example: A contractor builds a new home, but they also use subcontractors for the labor and material. Another example is a retailer who wants to add an additional insured on the insurance programs of the manufacturers of the products that are sold. In some cases, a mortgagee will add this to ensure coverage of damage left by tenants.
Basically, an insured endorsement on a certificate of insurance is where one party will add the other party as an “additional insured” on their commercial liability insurance policy. In the case where your company is added, the other company is protecting themselves against liability done by someone under the umbrella of your own company. By adding another company to your own policy with an insured endorsement on a certificate of insurance, you are protecting them from negligence from your own company.
To have additional insured status is a formal process that is done through a certificate and an endorsement. Your insurance agent is capable of taking care of the formal process, but there is also something you need to do. It is important to be certain that the business that claims to have added you has actually done so. In order to be sure, you have to see the actual endorsement; seeing the proof of insurance is not enough.
Another thing to keep in mind is that having an additional insured doesn’t negate the fact that an additional insured may need their own insurance. Those businesses must rely on their own insurance policy. For instance, you may add a subcontracting company, but this company will still rely on their own insurance for their needs.
Simply put, this insured endorsement on a certificate of insurance is not their insurance, nor does it cover their own problems. It simply covers you if they have negligence at your work site.
There are four things to keep in mind when conducting this type of business and each of them are integral to your success.
Learning about insured endorsements on certificates of insurance doesn’t have to be complicated when you have the experts to help you.
The Occupational Health and Safety Administration (OSHA) has monitored the workplace safety in American businesses since its inception in 1971. In that time, it has brought forth and adjudicated countless concerns related to employee and workplace safety.
OSHA’s main method of punishment is through fines, which makes August of this year a crucial month for employers of all sizes.
Last November, OSHA received permission from the Federal Budget Agreement to raise its fines for safety violations for the first time in more than 25 years. These changes would go into effect in August, along with a clause for potential future increases the bases fines on the Consumer Price Index.
More specifically, here are the new fines, which will go into effect this August:
Of course, these increased fines could have a major impact on your business. So here are four ways in which you can prepare for August to ensure you are not in violation of OSHA rules.
The most important step to take for OSHA compliance is to make sure that all of your safety documentation, regulations, and programs are up to date. Instead of being reactionary and only updating them when something goes wrong, it pays to be proactive and ensure a safety system is in place that helps prevent the problem to occur in the first place.
Of course, regulations and safety programs matter little if your employees are not in on it. So before August, you should make sure that your employees are properly trained in all safety protocols that pertain to them. OSHA’s compliance guide on safety training is a crucial document for this step.
To further protect yourself from liability, documenting your training structure and progress is a great step. Should a complaint arise, you need to be sure that you can show proper training to have taken place. In addition, monitoring your training helps ensure that all employees are involved and learn the necessary protocols.
Do you know just where your company’s safety hazards lie? If you don’t, now is the perfect time to find out. Aside from the obvious hazards, investigate and identify any problem areas that may not have led to safety concerns in the past, but could in the future. Again, OSHA’s Checklist for potential safety hazards in the workplace can be especially beneficial for small businesses.
Finally, be sure to involve your employees. Especially as it relates to safety, they are a crucial resource to help you in all of the above steps. If they feel that your safety programs need an update, listen. If they have feedback on your training programs, adjust. If they notice hazards in their daily work environment, take action.
Especially in a unionized environment, be sure to involve any official representatives to increase workplace safety transparency and make sure their concerns are addressed. Management and employees share a concern for safety, and working together proactively to achieve a safe workplace is in everyone’s best interest.
Ultimately, OSHA’s new fine structure for 2016 will not matter if your workplace is safe. And if you make safety a priority through the above 4 steps, you can help ensure that your employees maintain a safe environment and you don’t pay the increased fines. But when an incident does occur, you should be insured.
Imagine that another company falsely claims your company stole a new program it developed and threatens legal action. The catch is, someone working for you had already developed and implemented a program similar to the one at the other company before that competitor started to use this program.
What can you do?
If you have intellectual property insurance, you will be able to fight against a false claim that you stole the intellectual property of another company; something that, without this insurance, might cost millions of dollars to defend. You can also afford to consider legal action against another company if you believe a company stole something from you.
When someone steals your property or idea, considered the intellectual property of your company, or you are wrongly accused of stealing from someone else, it could cost you millions of dollars in legal fees. These fees could come from defending charges of infringement involving:
Intellectual property is important to small companies, as well as large ones. Smaller companies must provide services or make products without attacks on their intellectual property. Such attacks often come from bigger, better-financed competitors.
Such competitors usually attempt to drive them out of business, and small companies may learn quickly that protecting their intellectual property is their most important responsibility. This is the difference between success and failure.
In fact, because smaller companies are nimble, they often develop cutting-edge technologies before larger companies. That’s when the larger companies often notice them and sometimes they will just copy their new technologies. They will often assert patents against the smaller companies. Larger companies know such actions will often stop smaller companies altogether and at other times impede them as the smaller companies can’t afford multi-million-dollar intellectual property litigation.
Large companies can afford to wait out litigation for several months. Usually, the smaller company will accept an unfavorable settlement to get out of litigation.
When a company is alleged to have infringed on a competitor’s intellectual property, even if it did not actually do so, defending against a lawsuit is expensive. Even for larger companies, these suits are expensive. It’s no wonder the smaller companies seek to avoid litigation.
Cases claiming copyright infringement are also expensive. A successful defense of alleged copyright infringement can cost at least $150,000 in legal fees. Fees can cost $1.5 million or more in places like New York, San Francisco, and Boston to defend against allegations of patent infringement.
Some of the choices a company without Intellectual Property Insurance might face are:
If you believe your company is immune to lawsuits involving intellectual property because you don’t own any patents or copyrights, you might be wrong. Distributors, retailers, and others are often sued in cases involving the issue of intellectual property.
With the right intellectual property insurance policy in place, you can avoid the stress that comes with the treat of legal action, regardless of whether it comes from a competitor or someone merely trying to claim that something successful is theirs.
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If you are in the IT industry InsureYourCompany.com is the insurance agent you want to work with, we are technology insurance experts and have changed the way you do business. See below a list of professionals who we help today.
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