Contractor's Insurance

Hi, I just received a proposal from a contractor for a kitchen and bathroom install.  On the proposal a line item for $7,000 was included to cover the contractor’s insurance.  Is this normal?

shirleys

in Construction 13 years and 4 months ago

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mysteriousbrunette | 13 years and 4 months ago

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look up utica first insurance.  look for artisan policy.  It explains everything.  Knowledge is power

mysteriousbrunette | 13 years and 4 months ago

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It sounds like the contractor is broke.  Don’t ever work with a guy who demands a huge deposit up front.  Many contractors mismanage their money hence the insane fees.  Another problem is they can’t calculate the material you need.  Clients end up with so much brand-new leftover material.

jockdeboeraia | 13 years and 4 months ago

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Sounds like he is unlicensed and is passing the cost of get a licensed person and the resulting insurance on board.

masterbuilder | 13 years and 4 months ago

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I can’t speak for whomever you solicited a bid from.  I write insurance as a line item cost in our contracts.  It is very expensive.  My clients appreciate the transparency and clarity of the contract language.  Ask the contractor what it covers.

daveinbedstuy | 13 years and 4 months ago

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$7,000 additional for insurance???  You’ve got to be kidding.  What was the estimate for the whole job??  Send this guy packing.

greenmountain | 13 years and 4 months ago

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I don’t know what is normal in contract language.  But for Licensed Home Improvement Contractors, you can read your rights and required contract language at the Dept of Consumer Affairs http://www.nyc.gov/html/dca/html/home/home.shtml.  Contractors who build whole buildings, or renovate larger projects, may be licensed by the DOB. I don’t recall any prohibition from informing you of  the fee you will pay for items you require, such as insurance.   Is this a normal amount of money for insurance for the amount of work?   You haven’t said what kind of insurance.  Here are a few:  My classification for Workers Comp is probably the same as for your contractor.  I have never had a claim, yet my rates have gone from about 12 % of payroll to 20 % in 4 years.  Hard to accept, but your bath and kitchen will subsidize workers at major construction projects, like Atlantic Yards, where comp insurance rates for interior trades are much lower, or not higher for more dangerous exterior trades.  Consumers should know.  As for Liability insurance, rates are annual not by payroll, and to the limits of $1 million per incident or $2 million per year.  You may live in a coop requiring an umbrella policy, just for your job.  For a small company, with less than a few hundred thousand dollars in revenue, you could be required to pay thousands of dollars for your bathroom and kitchen.  Then there is unemployment insurance.  One contractor I know had an employee quit to take a better paying job elsewhere.  Next, the employee was laid off after a few weeks, and the original contractor  was charged $4,000 to support his former worker. Your contractor may also pay rates on a commercial vehicle at far higher rates than a personal vehicle, but at least disabiliy rates for men are low, but disability insurance rates double for women.
Thanks for asking.

bks2f | 13 years and 4 months ago

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NO THIS IS NOT NORMAL. THE PRICE HE GAVE YOU IT INCLUDES THE INSURANCE. IF HE WANTS ANOTHER 7,000 ON TOP OF THE PRICES HE GAVE YOU FOR KIT/BATH RENO THATS UN HEARD OF. I HAVE A RESTORATION COMPANY AND WE DO KITCHEN AND BATH RENOS ALL THE TIME. WE DONT CHARGE EXTRA FOR INSURANCE. YOU CAN CONTACT ME AT 347-279-8083 THANKS AND HAVE A HAPPY HOLIDAY.

allrenovation | 13 years and 4 months ago

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A contractors should already have on file a Liability and Workers Compensation insurance certificate.  If you live in a building managed by an Association or Management company other entity they’ll usually require a contractor to take out an additional certificate of insurance naming the Assoc. or Management company as the certificate holder.  The cost for this process is extremely minimal usually 5% of the project total cost.  My company usually works that fee into the overal total price of the estimate NOT as a seperate line item.  In sound too excessive for your project which is a basic kitchen and bathroom install.  I would price out the job with other contractors and compare the bids.   If you have any further questions feel free to contact me at the email below. Best of Luck, Rob Demetrio All Renovation Construction LLC Office: 718-351-4099 / Cell: 347-559-7962 rob@allrenovationllc.com http://www.allrenovationllc.com