Business FAQs

Business insurance FAQs provided by The Welch Group.

Your business is one of your biggest assets. That’s why it’s important to do everything you can to protect it — review the FAQs below.

What is my premium based off of?

Payroll, Classification and Loss History

Are they going to audit me every year?

Yes, you will either receive a physical audit or a mail in audit that you fill out yourself.

How does the audit work?

It is very similar to your taxes and the IRS. The insurance company will audit your payroll. If your estimated payroll was below the audited amount you will get a refund. If the estimated payroll was more than the audited amount you will get a refund. If its exact nothing will occur.

Should I let you know when I hire and fire people?

If you are letting someone go and not replacing them then yes. If you are letting someone go but will be replacing them immediately or in the near future then NO. Let us or the insurance company know on brand new “green” hires so we can increase your payroll amount appropriately.

We are constantly hiring and firing people, what should we do about payroll?

Estimate what the payroll for the year based on the number of people you think you wil have employed. The audit at the end of the year will pick up the months you didn’t have an employee working etc…..

As the owner do I have to be included in the workers comp?

No, but In the construction industry you can only exempt 3 owner/officers. Any more than that and they have to be included. Exempt owner/officers must have their exemptions on file with the state of Florida or you will be added to the policy and charged until you file your exemption.

I am hiring a temporary person for a temporary time. Can I add them to my policy?

Yes, We simply add them to the policy for the time they are with you.

What is an experience mod?

It’s basically a benchmark based on your claims experience that affects your rates. If it is negative, that is good. If it’s positive, that is bad.

What about sub-contractors?

They need to have their own insurance and you need a copy of a COI showing it or they need to have their exemption filed with the state.

Is my W.C. insurance good in other states?

Not unless you have that state endorsed on your policy.

What are monopolistic states?

5 states that require you to buy insurance directly from the state itself.

I have Florida employees in other states………..

If your company is a Florida based company and they are paid as Florida employees they can be added to your W.C..

Can I have my W.C. payroll drafted?

Yes, most carriers will offer that option.

Can I do self reporting?

Yes, most carriers will allow you to log on and report your payroll yourself and then make your own payment.

What are dividends?

It is a type of policy that allows employers to take part in the profits earned by their insurers. You have to qualify based on the size of your account and your losses. In addition, the carrier has to declare dividends.

I’m not sure how to classify what my employees do?

Classify them according to what they do the most, or what their greatest risk is.

What if my W.C. is through my payroll leasing company?

It doesn’t matter. You can still move it.

Is my W.C. cheaper because I go through my payroll leasing company?

No, that is a common misconception.

As a contractor is my premium based off of payroll?

Yes, payroll is a large contributing factor, but class code and loss history affect your premiums as well.

As an office/retail is my premium based off of Square footage and Gross Sales?

Yes, Sq, Footage and Gross Sales are a large contributing factor, but class code and loss history affect your premiums as well.

What about my 1099 subcontractors?

We are not Atty’s nor a CPA’s but based on the way the courts have been viewing 1099’s nowadays; the “DUCK RULE” applies. If it walks like a duck, talks like a duck and acts like a duck; its your duck! In other words, if you tell them when, where and how to do the work, then they are your employee regardless.You either have to include them on your insurance or get a copy of their current Certificate of Insurance (COI) showing active insurance. If not, you can be charged an entire year’s worth of insurance. 1099 is simply an IRS ruling and has nothing to do with liability.

Will I be audited every year?

Most contracting trades are in fact audited every year. Much like W.C. it is based off of your estimated payroll. If your estimated payroll matches your audited payroll you are fine. If your estimated payroll is more than your audited payroll you will get a refund. If your estimated payroll is less than your audited payroll you will get an invoice for the difference.

Why am I being charged for insured subcontractors?

Carriers still charge for insured subcontractors if you start using a bunch of them. The reason being is that your exposure has increased due to the fact that you now have a lot more sub-contractors working for you. Even though they have their own insurance you can still be brought in to a claim since you are the ones hiring the subcontractors.

What is the difference between a COI holder and an Additional Insured?

A COI simply shows that you have insurance in place. An Additional Insured endorsement means that we are providing them with actual coverage under your policy. There is usually a charge for the A.I. endorsement as well.

Do you have to check every driver before we hire them?

Not always. Some carriers require us to check them and some don’t. However, some carriers will take any driver and some have driver requirements. The last thing you want to do is hire someone to drive and it increases your premium by $6,000.00 or worst, you hire them and they can’t drive at all due to their poor driving record.

Can you tell me why this driver is not eligible

Unfortunately, due to privacy laws we can’t without the employee’s verbal or written consent. We can give the information directly to the employee and they are welcome to share it with you if they would like.

Is my rate based on my drivers?

Yes, that is one of the many factors that affect your auto premium. coverages, types of vehicles, number of vehicles etc…. All affect your premium.

What is the minimum limit that you write?

It varies by carrier, but we don’t like to insure clients below 300,000 in liability due to their risk exposure.

Should I put my personal vehicle on a business policy if I drive it for work?

It depends on what you do for work and how the vehicle is titled. If you are a professional you may be able to keep it on a personal policy and add a business endorsement to it. If you are a contractor and have ladders etc…. On your truck, it needs to be on a business policy.

What are all these auto symbols on my policy?

Basically, they reflect the type of coverage you have. Symbol 1 is the broadest and provides the most coverage.

Are my trailers covered if they are attached to my vehicles?

In most cases if they are attached to the vehicle than the LIABILITY from the vehicle extends to the trailer. However, when the trailer is not attached to the vehicle there is no coverage at all. This includes the trailer breaking loose from the truck.

Can I add my kid to the policy as a driver? They are going to work with me in the summer time.

We may be able to. It depends on the carrier. Let me get his/her info and find out for you.

I have to have this employee as a driver.

In some cases we/you can assign them a particular vehicle to drive. We can then spin them off to another carrier (Carrier that will take high risk drivers). It allows them to drive and keeps the premium down. However, the employee can only driver their assigned vehicle. It is usually a more expensive option but it allows the person to drive.

What about my other drivers?

In order for them to drive the “spin off” vehicle they must also be added to the “spin off” policy. This may make the “spin off” policy more expensive as most carriers are driver based. If you add multiple drivers with multiple violations to a policy, the policy is only going to go up in price.