Back in 2009 this blog reported on the very topic of Workers Compensation insurance, stating that 1 and 5 businesses are breaking workers compensation laws. In my everyday practice, I feel like the trend is still prevalent in the construction industry. The main reason being is due to the exorbitant price of this insurance on contractors.
Workers Compensation is codified in Louisiana under Revised Statute 23:1021 et seq. There are a myriad of rules and definitions within this chapter of the code that would make any contractors head spin. There are a few key items to remember when classifying employees. First and foremost is that there is a presumption of employee status, as seen in La. R.S. 23:1044. This can be overcome by a number of factors which would make the worker, an independent contrator rather than a employee. La R.S. 23:1045 is where the law states that independent contractors and subcontractors are exempt from coverage. Although the price to insure all employees under workers comp insurance is high, the price that is paid if an accident happens to an uninsured worker is much higher. Furthermore, when the insuring companies do an audit at the end of the year of the status, there can be a hefty price tag for improper reporting.
I represent a number of clients who are learning the hard way that companies like LWCC and Louisiana Home Builders Association are not fun to litigate against for a contractor trying to make profits. These companies have either in-house attorneys or law firms who handle these cases day in and day out. There is almost no incentive for them to settle claims because there is no fear of pricey litigation. As for the contractor, attorney fee bills keep going higher and at the end of the day the contractor can pay double and triple of what they would have if they had properly reported or settled early.
So let this be a warning to all contractors who are trying to push the line when it comes to workers compensation insurance, its just not worth it. Just like fighting any insurance company, even if the insurer is wrong, they will fight to the bitter end to be proven so. Taking an early haircut, so that you can get back to making money in the industry, can be a win-win for your construction company.
According to a recent Press Release from Marsh, a leader in insurance broking and risk management, construction firms across the U.S. will be facing new challenges in the upcoming year. Insurance rates have been declining for close to a decade, but rates are forecasted to increase between 8 and 10 percent. Firms with poor loss histories will receive higher rates, and some may not even be able to renew their policies.
This rise in rates is apparently the result of “soft market conditions” in recent years. Michael Anderson, Leader of Marsh’s U.S. Construction Practice, stated, “This comes against the backdrop of medical cost inflation and changes to some state statutes that have extended coverage beyond the insurers’ originally intended scope.” Mr. Anderson also goes on to explain that even with the increase in rates, the industry’s capital is still strong resulting in market conditions remaining competitive.
To read more about this Press Release and other interesting Construction Market Updates, click here.
Contractors need to be sure to stay current on all insurance so that the contractor will limit its exposure when occurrences happen. Being insured is a major expense in all construction companies. That expense will be justified when a claim is made. Insurers seek to exclude or deny coverage, therefore a good attorney will be needed to fight back. Here at Wolfe Law Group, LLC we handle situations where we work with insurers to aid our clients and other situations where we fight insurers to get them to pay our clients what they are owed under the policy.
This week New Orleans and south Louisiana are preparing for Hurricane / Tropical Storm Isaac to have an impact on the region. With these type of events come an aftermath where property owners and contractors are left scrambling to put the pieces back together. The best way to quell the negative effects of an event like this is to be prepared.
Undoubtedly, there will be those who need to make property damage claims. Undoubtedly there will be contractors who come into the area trying to make a few dollars on the repair. It will be tempting to save a few dollars and go with the cheap (unlicensed or uninsured) contractor but that is a recipe for disaster.
There are lots of great resources for homeowners and contractors alike at Louisiana State Contrators Licensing Board’s website. This is a very important step in finding good qualified contractors to do remediation work. Further, contractors who come in from out of state will need to register on this site before performing work in Louisiana.
As for dealing with insurance companies to make your claim. I advise clients to take pictures and video of your property before the storm makes landfall. This will give you an up-to-date log of your inventory. Then after the damage has occurred, then you will need to make yet another video/picture document log. Concurrently with this you will need to put your insurer on notice of any and all claims. Look to your policy, insurer’s website, or the Louisiana Department of Insurance website for contact information on your company. Notice of the claim is nearly as important as documenting the claim. Click here for a more detailed claims process rundown.
In recent years Wolfe Law Group has handled hundreds of insurance claims dealing with property loss. Contacting experienced professionals to help with your claim will ensure that you receive the maximum amount of indemnity. We will be monitoring the situation closely for our neighbors in South Louisiana.
Guest Post: Sarah Smith – legal assistant at Wolfe Law Group, LLC.
It’s been seven years since devastating Hurricane Katrina destructed the City of New Orleans, and in that time the city has joined together to move forward in a positive direction to help rebuild the historical attraction. The pride and persistence of the residents have kept the city alive, and their determination has not gone unnoticed. FEMA has granted New Orleans $40 million to continue its transformation to a restored city. The grant has been allocated towards roadways in New Orleans and surrounding areas, New Orleans Museum of Art, LSPCA, Youth City Center, LSU Health Sciences Center, and LSU School of Dentistry. The bulk of the grant will go towards the Morris F.X. Jeff Municipal Auditorium in which significant damage to the electrical and mechanical systems, floors, walls, and seats will be repaired. This city has proven to stay confident and resilient through difficult times, and such a grant will add to the city’s positive focus. If you would like to find more information about the breakdown of allocations, check out Nola.com’s article.