# Sub Contracting and liability...



## PlowVA (Nov 8, 2004)

Spoke with a friend of a friend yesterday who has a bunch of residential and commercial snow removal contracts for the upcoming season. He runs one truck and has too many accounts to handle. He is offering me 2/3 of the price he charges for a job (both Comm and Residential). He also says I do not need any plowing insurance. Says his company insurance will cover me (the sub) for any damages. Does this sound right to you guys? I still have a feeling like I need to have some insurance of my own.

If he is telling me the truth, then how does it work? Does he just add me onto his liability coverage for plowing? If I am just driving around to/from a job and get into and accident, does that go on my personal or his commercial insurance.

My intent is to insulate and liability from my family's assets should there be a problem.

Too many questions. Head spinning. Help!

JP


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## Mick (May 19, 2001)

Be careful. There are really only two designations to consider here - contractor vs employee. A subcontractor is still a contractor (consider all the companies involved in major construction projects - they are all subcontractors). If you are a contractor, you can be held solely liable for your performance or non-performance. If an employee, you can still be held liable - just maybe shared with an employer. If you would like to determine your status - this will be done AFTER you get sued. To get an idea of your status:
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html


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## JMR (Feb 24, 2003)

IMO, I would say that as long as you are a "sub" you should not need General Liability. Any claims for slips and falls should come back to the contractor. I would think that you will still need to insure your vehicle with coverage for plowing, this is usually some type of commercial vehicle insurance. I would however want a copy of his general liability policy and maybe a copy of the contract with the customer. Even with all of these you still may want GL, you know how attorneys can be today in our sue happy society.


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## johntwist (Feb 10, 2004)

I can't speak about the issue of his insurance company covering you while working as a sub, one of the other guys will have to do that.

But, I can say that if you are going to drive your truck with a plow on the front of it you should have your truck insurance updated to cover it. Just call your agent or company about it. If they don't offer it, which mine did not, you'll have to do what I did and switch carriers.

I ended up having to switch to commercial plates and a commercial policy that gives me coverage for up to 1 million for property damage. I know that if your employer's insurance ends up covering you while you're working for him you may not think you need this, but I doubt it will also cover you when you have to transport the plow to and from, and for when you're not on his time.

Also, my insurance covers my plow itself in case of damage in a motor vehicle accident for full replacement value, whether the accident is my fault or not. This is very important, especially if you are buying a new setup. The best part is that when all is said and done, I'm only paying about $45.00 more per year than I was before, and I have a perfect driving record.

In any case, be careful. Make sure he's not giving you a b/s story about his insurance. I don't know how well you know the guy. But if you take his word for it and he's either not covered, or his coverage does not cover you, you're the one who'll end up with this look on your face,  

Good luck! :waving:


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## PlowVA (Nov 8, 2004)

Just spoke with the guy again to clear up some issues. What do you guys think about this info...

1. Found out he does most of his business on the side (mostly personal checks made out to him, only a company check from time to time)

2. He does not get out of the truck (ie., no salting or sanding). This is good for me, right? No salt or sand = no liability for slip/fall accidents???

Sound "above board" to you guys or a little fishy??

(Anyone looking for a responsible, hard-working person to sub out plowing work in the DC metro area?? I'm available!!)


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## Mick (May 19, 2001)

Plain and simple - this is not a fully legitimate business.

and #2 is not accurate. You will still be liable for slip & falls.


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## DJL (Oct 28, 2003)

STEER CLEAR!!!!!!!!!!!!!! YOU ARE NUTS IF YOU DO ANYTHING FOR THIS DOPE!!


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## jeepman4u (Nov 27, 2004)

PlowVA said:


> Spoke with a friend of a friend yesterday who has a bunch of residential and commercial snow removal contracts for the upcoming season. He runs one truck and has too many accounts to handle. He is offering me 2/3 of the price he charges for a job (both Comm and Residential). He also says I do not need any plowing insurance. Says his company insurance will cover me (the sub) for any damages. Does this sound right to you guys? I still have a feeling like I need to have some insurance of my own.
> 
> If he is telling me the truth, then how does it work? Does he just add me onto his liability coverage for plowing? If I am just driving around to/from a job and get into and accident, does that go on my personal or his commercial insurance.
> 
> ...


He is telling you the truth, like with mine insurance it covers them when i sub some out to them but it will not cover workmen comp on them.


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## 4evergreenlawns (Oct 22, 2002)

Are you serious with these Q's???

You seem smart enough to know you should be asking about Liability but can not see the taking PERSONAL CHECKS made out to HIM PERSONALLY as a "ON THE SIDE" thing is flat out not RUNNING A BUSINESS therefore his BUSINESS INSURANCE will not cover anything?? 

I am curious is this guys' name TONY, LOUIE, or ROCCO??? He does not happen to own a waste managment company too? I bet he is telling you something like, "Aaaa wat insurance??? Fogettabouit!!! This is cash money"

If you are serious about doing SUB work and want serious help then find a SERIOUS company to work for get the insurance on your truck and pay for the GL. Than ask for a Sub-Contractor agreement in writing and all COPIES signed by both parties. Any company NOT willing to do this is not worth your time or the risk. End of story.


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## Robhollar (Dec 27, 2003)

The way that I understand it, if you dont work for somebody else then your NOT a contractor. In fact your employee. This may not work in the snow plowing bussness. I have a buddy who has a lawn fertilizer company. He had 2 subcontractors who work for him and one of them got hurt in a fall. Well come to find out cause the guy who got hurt didnt have another job in a related field then he wasnt considered a sub. But because he wasnt paying workman's comp on theses guys then he almost lost his company. Like I said this may not be the same thing but you better check everything out, dont assume anything...Rob


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## Mick (May 19, 2001)

You COULD be a subcontractor and only work for one person. It depends on if you have the option of working for other contractors and if you control certain aspects of the job. Also, do you provide your own tools and equipment? Although, you could be required to provide your own tools and still be an employee (ie; many shops require mechanics to provide their own hand tools).

On the other hand, my insurance agent told me about the guy who asked a friend of his to go plow one of his accounts (one-time job). Friend got hurt and filed for WC. Contractor claimed friend was a subcontractor. Friend claimed he THOUGHT he was an employee and therefore should be entitled to WC. Court sided with the (ex)-friend. Contractor was fined big, had to sell his equipment to pay the fine and wound up going out of business .


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## Robhollar (Dec 27, 2003)

What I do know just because you call somebody a contractor , doesnt make him a contractor...Rob


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## DJL (Oct 28, 2003)

Robhollar said:


> What I do know just because you call somebody a contractor , doesnt make him a contractor...Rob


 

Correct. Read them rules the gov't has. Most of us "contractors" would be considered employees under these regs. Basically, if the contractor tells you when to show up, how to do the job, and when to leave, you are an employee. On the other hand..If the contractor says I'll pay you $500 dollars to clear that lot and that's it, you are a sub-contractor.

this isn't etched in stone but it goes something like that.


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## 4evergreenlawns (Oct 22, 2002)

Along with payment "TERMS" if you the person doing the work supplies most of what is needed to do the work, (Truck, Plow, Insurance, Gas, Labor) and you are not DIRECTLY involved with the CLIENT (primary company CONTRACTED to do the work on PAPER) then it is considered SUB CONTRACTING. This is way different than the employer requiring you to have tools of the trade. 

The real problem is when a guy what to be a SUB CONTRACTOR until something goes wrong such as; Property Damage, Accident, Injury, THEN the guy now want to be an EMPLOYEE. 

Clear way I define who is what is, employees get paid and work when and how I TELL THEM, SUB CONTRACTORS (when I used them in the past NO MORE) sign a SUB CONTRACTOR AGREEMENT which is very clear to the how, when, where, why, responsiblities and so on. 

For example: the agreement I used in the past stated if the Sub was unavailable to cover the Route assigned and did not provided 48 hours notice of Unavailablity prior to the Plowable Event, the Sub would be responsible for any labor cost to cover route over the agree rate. This often sent most Wanna Be sub running. 

Again, I do not use Subs any more.


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## plowman350 (Jul 19, 2004)

*Definite Sub*

Under this situation you are definitely considered a sub-contractor. This means that you're in business for yourself....you should at a minimum understand that auto accidents in your truck are your responsibility....be insured properly.

As far as general liability......most contractors require their sub to have their own policy an list the main company as a "second insured." If they claim that their liability will cover you, then get it in writing before you go out. Have the contractor write something that says he personally advised you not to obtain your own insurance, and that he is providing all necessary liability insurance. Further he agrees to defend and hold harmless (you) in any cases of liability, claims, or negligence.

Here's the the chain of events....you mess up someone's garage door. That person sues the contractor. The contractor says "I didn't do it" and sues you, or advises the homeowner to sue you. You need to have something in writing from your contractor before you work.


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