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Building Oklahoma’s Communities

Insurance for General Contractors

CompSource Mutual has been operating in Oklahoma for more than eight decades. During that time, we have developed business practices specialized to serve the construction industry and its workers.

Ready to get protected? Our Oklahoma-based team has the expertise to offer you coverage that makes sense for your construction business’s unique risks. Get a Quote 

Interested to learn more? Read on to get answers to common questions and concerns about workers’ comp in the construction industry. 

Insuring Your Construction Business

While CompSource Mutual specializes in workers’ compensation insurance, it is important to understand the entire ecosystem of insurance types that your business might need.

Construction is a notoriously dangerous job. According to a 2020 survey by the Bureau of Labor Statistics, workers in construction and extraction operations (like mining) had the second-highest number of workplace fatalities. Construction work injuries are also high. In 2020, nearly half of all recorded workplace injuries among construction workers resulted in days of missed work.

These statistics highlight why it is so important to have insurance for general contractors. Due to its high-risk nature, there are a number of different types of insurance for the construction industry, including:

  • Liability insurance
  • Property insurance
  • Commercial auto insurance

But one of the most important types of insurance for general contractor companies is general contractor workers’ comp, or workers’ compensation. This type of insurance protects your employees, a business’s most valuable asset. In the event of a covered workplace injury or illness, the employee is compensated through the workers’ compensation insurance company for things like medical bills and missed wages. If their injury or illness merits extensive time off, a workers’ compensation policy may also provide disability payments to the employee. However, the construction industry heavily relies on independent contractors. In most states, independent contractors are not subject to workers’ compensation. While this takes the financial burden off of the employer—savings, which can then be passed on to customers—the employee is then left to pay for medical bills on their own. This is a less-than-ideal situation for workers in a dangerous industry.

Known risks in CONSTRUCTION:
  • Vehicle or equipment accidents
  • Falls from heights
  • Construction material strikes
  • Exposure hazards
  • Cumulative hearing loss
  • Eye injuries

Worker classification in the construction industry

Over the past ten years, the Internal Revenue Service (IRS) and the Department of Labor have begun looking more carefully at how employers classify their employees. Under U.S. law, a worker can be classified in one of two ways:

  • As an employee. Employees are subject to tax withholding, but are also protected by certain laws. Most employees can access things like mandated lunch breaks, sick time, and workers’ compensation. Employees are also subject to more control by their employer, who can set their work hours, work location, and choose the method by which they complete work tasks. Employees are also typically paid a salary.
  • As an independent contractor. Independent contractors have much more say over how and when they complete their work, but they are personally liable if they get sick or injured. They are typically not provided with any benefits, such as health insurance, and are usually not covered by workers’ compensation benefits.

There are pros and cons to both types of work, for both employer and employee. However, in 2014, an investigative report found that many construction companies were misclassifying their workers as independent contractors. Doing this saved the companies money but left their workers unprotected.

Worker misclassification is, unfortunately, a common occurrence in the construction industry. It saves companies money in the short term, but takes advantage of many construction workers. Companies that do not want to carry workers’ compensation insurance for general contractors may treat their workers as employees, but do not provide them with any of the benefits. This can create a significant problem for numerous construction workers.

Workers’ compensation for contractors is a necessary provision in the construction industry, as workplace injuries and missed days of work are common. Businesses may be hesitant to invest in quality workers’ compensation insurance due to the cost. However, benefits outweigh the initial cost in the long run by reducing worker turnover, providing more job stability, and reducing missed workdays. When one considers the investment from this perspective, insurance for general contractors can be a critical component of a solid business model.

Insurance for different types of construction workers

Construction is a diverse industry with many different specializations. Carpenters, for instance, work in a variety of settings. Some carpenters are classified as “rough carpenters”, working on construction sites and in industrial settings. Others may be “finish carpenters”, who work on finer woodworking projects, like furniture.

Nearly one-third of all carpenters in the U.S. are self-employed, operating as independent contractors for others. In that case, the business may or may not have to acquire workers’ compensation benefits for their workers. However, many carpenters do work for an employer. In such instances, insurance for carpenters is frequently provided by the employer. In fact, many employed carpenters are members of unions, which help secure additional protections for their workers. Carpenters who work for large organizations or governmental bodies, such as the State Department of Environmental Conservation, are more likely to be classified as employees, and as a result, have access to workers’ comp for carpenters.

The roofing industry is another highly specialized subset of construction. Roofing is primarily an outdoor profession. As such, weather plays a part in roofers’ ability to complete jobs. This inconsistent work schedule leads many roofers to work as independent contractors; in fact, about 18% of all roofers are self-employed. However, this approach can be dangerous for workers; roofing is known to be a hazardous job, and roofers should have access to protections like roofing workers’ compensation insurance. Roofers are at risk of falling from great heights, and may be burned by hot roofs in the summer. Insurance for roofers may be provided to full-time workers employed by large companies rather than seasonal independent contractors.

Why CompSource Mutual

CompSource Mutual understands the unique needs and demands of the construction industry. Our website provides safety and training materials for general contracting companies, such as safety checklists, workplace safety analyses, and safety talks for various specialties. Like any service that supports your business, workers’ compensation coverage should be easy to understand and helpful for your employees.

The cost of workers’ compensation insurance depends on several factors, including the type of industry and level of risk associated with it, how many employees you have, or how large your payroll is. Additionally, requirements and regulations for workers’ compensation vary between states, which can also impact insurance cost. In North Carolina, for example, insurance for roofers can cost up to $8.45 per $100 of payroll. In contrast, it costs $.61 per $100 of payroll for workers’ comp for restaurant workers, which is a lower-risk job than roofing.
At minimum, you should carry a workers’ compensation policy, a professional liability policy, and a general liability policy. If your company has a vehicle, you should also carry commercial vehicle insurance.
Unfortunately, a large number of construction workers do not have access to workers’ comp. This is because many construction workers work seasonally, temporarily, or in short-term positions. But a large number are misclassified as independent contractors when they should be classified as employees. Being classified as an employee of a general contracting company would give these workers access to benefits like workers’ comp.
Meet our Safety Team Image

Meet Our Safety Team

Are you committed to making your workplace safer? We’re here to make it easy for you. CompSource Mutual policyholders can get advice from our safety consultants and access personalized resources – it’s all absolutely free.

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