Contractor insurance cost for full gut renovation

Don’t focus too much on that line. There might not be much the contractors can do about it. Focus more on who you want to do the job and understand that we live in a free market. If a contractor WANTS a job, he or she is going to write the quote as honestly as he can because he knows if he does not, someone else will get the job. And there is no smoke filled back room in a neighborhood on the east side of broadway in lower manhattan where we meet to discuss pricing.

If customers begin focusing on line items, i get nervous. A couple of things can happen here: they try to get us to shop for the impossible-to-get a deal that somehow costs us (the contractor) more money and sometimes they try to manipulate us into doing things that go against our judgement and might be unwise, unsafe, or illegal (advanced mentions worker’s comp; there are people on this board who can care less if a contractor breaks this law). When i see this behavior – lowest price at the risk of a lot of other things – i get nervous that the customer does not have the money to do the job and should not be doing the job.

I realize you are newer to this. instead of being overly suspicious that something is wrong, understand that the free market works in your favor – not the contractors. The exception to this is collusion and if that is happening. I am not aware of it.

Insurance has become a ugly animal in NYC especially with legit contracting companies.
Our company has been in business for 30 years and never ( touch wood,,,tapping noggin !!) had a claim but our insurance rates escalate very year regardless of our record. Workers Comp which use to be competitive 15 – 20 years ago when larger companies like AIG and Rochdale etc. use to compete with the State Insurance Fund kept premiums kind of honest but when the larger companies decided to start dropping smaller / medium size companies with premiums of less than $ 100k a year you were left with no other option but to turn to the State Insurance Fund (SIF). Being run as as a state entity SIF began getting cute with their method of calculating premiums . For example there use to be a catagory for General Laborers which use to be in $ 15 / 16 per $ 100 of gross salary earned but when SIF got their mitts on the large majority of small and medium contractors they decided to move the goal posts and and eliminate the General Laborer catagory and state going forward if a laborer works with a mason or carpenter etc the new rate will be the same rate as the trade the laborer is working with. So with carpenters, masons, painters rates being in the $ 28 to 35 per $ 100 of gross earnings. So now if you have a gal / guy/it working 6 hours a day sweeping and cleaning up and they / it spend one hour helping a carpenter unload material you have to pay the premium of a carpenter for that 8 hour period. By this manipulation SIF has legalize racketeering but hey in NY anything goes if you support the right tribe. and become indifferent,
General Liability, Comprehensive Liability, Disability Insurance etc rates depending on your coverage amount overall have increased over the last 15 years but not to the extreme excess of Workers Comp.
So in a nutshell if you are a contracting company that may have a claim or two you are at the mercy of the insurance companies and your premiums will reflect the difference between what contractor A and B is passing on to perspective clients.
Being 30 years in the business our company has never added a percentage to our insurance costs to clients. What we pay is exactly what the client pays and not a cent more unless if the client request a multiple of insurance certificates with lots of
additionally insured recipients then we charge exactly what the insurance company charges which is $ 150 per additionally insured.

For clarification, this is a licensed GC you are thinking of using? You are not a talking about a home improvement contractor? There is a big difference in the cost of insurance for these two very different animals..

Somebody brought this same question on here a few weeks back and i will tell you what i said to them: all companies have to make money. It does not matter how they do that – whether they mark their labor up more or less or whether they mark up materials and subs more or less. They may mark insurance up more and may mark something else up less. Or maybe their insurance costs more because they have had claims. There is no right and wrong way to do this and what works for one contractor might not work for another.

Instead of trying to look at each line item as if your questioning the legitamacy of it will somehow save you money, why not just look at the contractors and see who you think will do the best job and who you will like to work with and then look at the price. If the person you really like has a lower price, great. If the one yo u like gives you a higher quote ask yourself do you like that contractor because he or she has more experience and you think that they will do a better a job? That higher cost might just be the cost of that experience and paying an experienced crew more and nothing else; it may have nothing to do with the insurance even though to cover added expenses, they mark the insurance up 8% when another contractor marks it up 5%.

Basically, their price is their price. That figure is what they are comfortable doing the job at and it should be left where it is. If you don’t like the price someone puts forth including what ever it is they might mark something up, there is always someone else (when we go grocery shopping, do we care if store “a” charges more for turnips than store “b” because they pay more for insurance or mark it up and add it to the retail price of all goods?, no we don’t care. Do we negotiate with the manger? No we do not. we simply go to another store; you have that option here.)..

While i can’t answer that, i have a friend who is an owners rep/construction manager. Works with a lot of typical Brooklyn developers. Well experienced and knowledgeable on the subject of construction and its costs. You can find his info on elbconstruction . com