Commercial Clients and Worker's Comp

[Bryce C]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

 

[jeffexe]

All of my commercial apartment and senior communities require the ghost policy. I incorporated it into my pricing. It is kind of ludicris, but again, another expense for doing business. Wait until they decide to have a company do their payments. They require so many pages of crap and specific wording on policies. Then they deduct 3% from your invoice for administrative fees. Yes, You have to pay to get paid.

 

[BIG WOOD]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

Do you know a contracting company you can bill it under that you trust? I manage a local apartment complex here that has 3 complexes and I bill it under their company they use to refurbish the apartments after someone moves out.

Other than that, you could ask them if they need 5-7% to put you under their policy. They will take that percentage out of what you bill to pay for the insurance. I"ve done that also

 

[Bryce C]

Do you know a contracting company you can bill it under that you trust? I manage a local apartment complex here that has 3 complexes and I bill it under their company they use to refurbish the apartments after someone moves out.

Other than that, you could ask them if they need 5-7% to put you under their policy. They will take that percentage out of what you bill to pay for the insurance. I"ve done that also

I don't understand billing it under another contracting company, that seems odd. At that point would the property management company know that their invoices for carpet cleaning are coming from their non-carpet cleaning contractors? If their main concern is liability protection would that be a red flag for them?

Having the property management company deduct a percentage to throw us on their insurance makes sense. I suppose if we land more commercial work that requires workers comp than it would make sense to have our own policy, and if not then to have them add us to theirs if they're into it. At this stage with your business is it still only one property management company that requires the workers comp coverage or do you have more customers that require it?

 

[Dwain Ray]

It's my understanding you cannot get workers comp on yourself unless you are a corporation and hire yourself.

 

[Dwain Ray]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

Explain to them that you are an owner/operator with no employees

 

[Bryce C]

Explain to them that you are an owner/operator with no employees

They already know that. My wife and I sat down and went over everything in detail for an hour with the manager of the large property management organization. They require workers compensation anyway. As I was calling around getting quotes from insurance companies they didn't seem to have any issue with me being an owner/operator with no employees

 

[Dwain Ray]

Listening to that kinda corporate crap makes me glad i live and work in a rural area. My advice is walk away or Get the price for the insurance write a professional proposal total the amount for the work then add additional insurance requirements charge 120% of your cost and submit it to them. If they require it make um pay for it

 

[Dwain Ray]

my last run in with crap like that was about 15 years ago when while minding my own business cleaning a carpet the city came by and shut me down for not having an encroachment permit to run my hoses across the sidewalk. All pissed off i stormed down to city hall to see wtf! As it turns out they could care less about encroachment buried deep inthe paperwork was a clause that held the city "harmless " on my employee workers comp. Thats what they wanted so 3 days and 135.00 i was back in business , almost the encroachment permit issued stated window cleaning equipment. Pissed off i stormed back to city hall and demanded that they change it to say carpet cleaning equipment! They did with a ink pen. I left city hall with encroachment permit for carpet cleaning equipment in hand. Drove around the corner and the cheif of police was standing outside my favorite coffee shop chatting with someone. The parking spot right in front was not big enough for me to park my van parallel to the curb so i ramed th passengers side wheel up on the curb till the drivers side hit. The cheif of police jumped back reaching for his gun yelling wtf you think you're doing!!! At this point all the customers in the coffee shop are pressed up against the windows watching whats going on. I said to the police cheif " just a second", i poped outa my van and handed him the paper i had received from the city a few minutes earlier and i informed him that i have an encroachment permit and walked away to get my coffee.when i came out he folded the paperwork ,handed it back to me and with a smile said thats good n all, but you still can't park that way. That alone was worth the 135 bucks i spent but it didn't end there 6 months later city hall called for a carpet cleaning estimate i wrote the estimate with a price then added a charge for licensing and permits for an extra 175.00. They questioned and bocked over the charge. But as it turned out i was the only bid and thats how i got back my "pound of flesh " when all else fails i use there rules against them!

 

[Living The Dream]

Before we had employees we were able to get a work comp exemption form and that satisfied all our commercial accounts. Not sure if your state has that option, but it's worth looking into.

 

[Living The Dream]

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1. Who is required to carry workers’ comp in Connecticut?​

• Any business with one or more employees (full-time, part-time, or seasonal) must carry workers’ compensation insurance.
• If you are the sole owner/operator and have no employees, you are not automatically required to carry workers’ comp.

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2. Do carpet cleaning companies qualify for exemption?​

Yes — if you are the owner/operator of the company and have no employees, you qualify for an exemption under Connecticut law. This is the same as any other trade or service business (construction, landscaping, cleaning, etc.).


But there are nuances:

• Sole proprietor: Not automatically covered; can elect in with Form 75 if you want coverage.
• LLC member or corporate officer: Automatically covered unless you file Form 6B to exclude yourself.
• Partnership: Partners can file Form 6B-1 to exclude themselves.

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3. Important Considerations for Carpet Cleaning Companies​

• If you hire helpers, techs, or part-time cleaners, you must provide workers’ comp for them.
• Even if you’re exempt, some commercial clients, property managers, or HOAs may require a certificate of workers’ comp insurance to award you a contract. In those cases, you may need to carry a “ghost policy” (a policy that covers no employees but satisfies contract requirements).
• Carpet cleaning is not classified as a “high-risk” occupation like construction roofing, but injuries from slips, chemical exposure, or lifting equipment are common — so some owner/operators still elect coverage for protection.

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4. Summary​

Yes — carpet cleaning companies can qualify for exemption in Connecticut if you’re the owner/operator with no employees.

• If you’re a sole proprietor, you don’t need to file anything unless you want coverage (Form 75).
• If you’re an LLC member or corporate officer, you must actively file an exclusion form (6B) if you don’t want coverage.
• Once you hire anyone, even one part-time cleaner, you must carry workers’ comp.

 

[BIG WOOD]

I don't understand billing it under another contracting company, that seems odd. At that point would the property management company know that their invoices for carpet cleaning are coming from their non-carpet cleaning contractors? If their main concern is liability protection would that be a red flag for them?

The contracting company is subbing you out, so it doesn't matter how they label it on their invoice. It wouldn't be a red flag. They are still managing the maintenance and repairs on the property, and carpet cleaning falls under that category of maintenance. And yes, this is the only company that does that with me. They're actually the best customer I have. He told me to keep his credit card on file and just run the transaction after each job. He's never questioned my prices, nor does he require approval before each transaction. And he sounds cajun, which is entertaining when I talk to him, lol

 

[Cleanworks]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

All commercial properties require it. Not all will ask you for it. Sometimes they want proof before cutting you a check. Where I am at, I am able to get a personal protection plan and can expand it with a phone call if I am using employees or subcontractors. Ours here is from the government. Check around if something similar exists in your state.

 

[Bryce C]

my last run in with crap like that was about 15 years ago when while minding my own business cleaning a carpet the city came by and shut me down for not having an encroachment permit to run my hoses across the sidewalk. All pissed off i stormed down to city hall to see wtf! As it turns out they could care less about encroachment buried deep inthe paperwork was a clause that held the city "harmless " on my employee workers comp. Thats what they wanted so 3 days and 135.00 i was back in business , almost the encroachment permit issued stated window cleaning equipment. Pissed off i stormed back to city hall and demanded that they change it to say carpet cleaning equipment! They did with a ink pen. I left city hall with encroachment permit for carpet cleaning equipment in hand. Drove around the corner and the cheif of police was standing outside my favorite coffee shop chatting with someone. The parking spot right in front was not big enough for me to park my van parallel to the curb so i ramed th passengers side wheel up on the curb till the drivers side hit. The cheif of police jumped back reaching for his gun yelling wtf you think you're doing!!! At this point all the customers in the coffee shop are pressed up against the windows watching whats going on. I said to the police cheif " just a second", i poped outa my van and handed him the paper i had received from the city a few minutes earlier and i informed him that i have an encroachment permit and walked away to get my coffee.when i came out he folded the paperwork ,handed it back to me and with a smile said thats good n all, but you still can't park that way. That alone was worth the 135 bucks i spent but it didn't end there 6 months later city hall called for a carpet cleaning estimate i wrote the estimate with a price then added a charge for licensing and permits for an extra 175.00. They questioned and bocked over the charge. But as it turned out i was the only bid and thats how i got back my "pound of flesh " when all else fails i use there rules against them!

That's some of the funniest junk I've heard in a bit Dwain. I like your style man. Just bill the government for their own nonsense when they contract you for cleaning services in the future! Good form sir spelling out "licensing and permits" as an extra charge on the invoice rather than silently absorbing it into the overall price. Oh yes!

 

[Dwain Ray]

That's some of the funniest junk I've heard in a bit Dwain. I like your style man. Just bill the government for their own nonsense when they contract you for cleaning services in the future! Good form sir spelling out "licensing and permits" as an extra charge on the invoice rather than silently absorbing it into the overall price. Oh yes!

I woulda probably hid it but i knew that my competitor was outa town and wouldn't be bidding and i wanted to get my point across when they bocked i informed them that fees can't just be absorbed, someone has to pay. Some time whenyou need a smile ill tell ya about the catch 22 i put the city in over getting a moving letter sign on my building a classic using there rules against um

 

[Bryce C]

......... Anyways, my worst day yet...

 

[Kenny Hayes]

I couldn't read through all of that Bryce, sorry Dwain for the thumbs down Your agent can or should be able to get you policy and exclude yourself. Your state will do it if your agent can't. It's written for minimum premium cost. It's for sole proprietors. I suppose you could call it a ghost policy, however, if you add a helper, that person would be covered.

 

[Bryce C]

I couldn't read through all of that Bryce, sorry Dwain for the thumbs down Your agent can or should be able to get you policy and exclude yourself. Your state will do it if your agent can't. It's written for minimum premium cost. It's for sole proprietors.

That fine Kenny. Someone someday will read it, and sympathize with my pain. Or they will tell me I am even more of an idiot than I feel at the moment, that may be a good thing. Maybe that should be a personal journal entry but I wrote it on Mikeys Board

 

[Bryce C]

I don't understand these workers comp ghost policies, picking up workers comp that literally covers no one. Unless it releases the commercial customer from liability risks of getting sued if I get injured on their property, which it doesn't seem like it does.

I forwarded the overview of the ghost policy coverage that excludes me to our new commercial customer to make sure it suffices, and they got back and said yes it is fine. Seems to me like it just checks a box but offers no protection for anyone, I am shocked our commercial customer approved of it. But from what I read most do. The policy costs $1200/year, for a seemingly meaningless formality.

 

[Kenny Hayes]

I wasn't speaking to your post. You just happened to get it in just before mine. I was
referring to all the other posts as I scanned to see if anyone knew.Ask your agent, then proceed. it won't be expensive.

 

[Kenny Hayes]

Don't take that term for real. If you have health insurance, there's no need for WC for yourself, You do have to have a policy. You wouldn't file a claim against yourself. Some corps just ask for it instead of eliminating it. They will want a certificate of insurance for coverage and that will be included. They want to be sure they're not liable for your injuries if you hurt yourself on their property I have 30 employees, and my girls and myself are excluded on our WC policy.

 

[Dwain Ray]

I couldn't read through all of that Bryce, sorry Dwain for the thumbs down Your agent can or should be able to get you policy and exclude yourself. Your state will do it if your agent can't. It's written for minimum premium cost. It's for sole proprietors. I suppose you could call it a ghost policy, however, if you add a helper, that person would be covered.

My only experience with trying to get workers comp on myself was back when i had employees and i included myself but during the first (of many) audits state fund said thats a no no and i was removed and had to fight to get my premium back (i was successful, eventually)

 

[Kenny Hayes]

Im not sure I understand that, but each state is different (somewhat). You needed a better agent! A good agent would write one through the state for you ProBono if he has the rest. We always would.

 

[Bryce C]

Don't take that term for real. If you have health insurance, there's no need for WC for yourself, You do have to have a policy. You wouldn't file a claim against yourself. Some corps just ask for it instead of eliminating it. They will want a certificate of insurance for coverage and that will be included. They want to be sure they're not liable for your injuries if you hurt yourself on their property I have 30 employees, and my girls and myself are excluded on our WC policy.

Don't take what term for real, ghost policy? Or worker's comp? I don't understand, these folks wouldn't accept a COI that doesn't have some kind of workers comp on it. Beforehand my COI had general liability but worker's comp was a blank box...

 

[Kenny Hayes]

Is 1200 through your state or a carrier. There are associations that specialize in that type of coverage that could be less expensive. As it stands as an o/o, there's is no coverage. There is minimum premium cost for that sort of thing.

 

[Bryce C]

Is 1200 through your state or a carrier. There are associations that specialize in that type of coverage that could be less expensive. As it stands as an o/o, there's is no coverage. There is minimum premium cost for that sort of thing.

Through a carrier. I'll make more calls on Monday. What department or agency of the state does one contact for inquiring about workers comp coverage?

 

[Kenny Hayes]

Ct. Gov. Workers Comp. Go to the bottom of the menu for contact us. You can cut to the chase with them and tell them what you have and ask if that's the minimum premium for our classification.

 

[Bryce C]

Ct. Gov. Workers Comp. Go to the bottom of the menu for contact us. You can cut to the chase with them and tell them what you have and ask if that's the minimum premium for our classification.

Thanks Kenny!

 

[BIG WOOD]

The reason these corporations require these workers comp/ghost policies is not to make certain you won't get hurt. IT's to confirm and let them know they won't be sued if you trip over your hoses and injure yourself.

I think it's BS because owner operators won't do that anyway, because we have to work our asses off to survive. If we get hurt, we'll still work anyway. But I know the headache you're going through. I had that ghost policy to at one time and it was a waste of money. I only needed the policy for one account and that took all the profit off of that account. People love screwing our businesses. Sorry for being negative.