10 Things to Know About Residential Contractors

September 9, 2013
  1. There is a key difference between an independent contractor and a subcontractor. An independent contractor relationship exists where there are two parties, such as the owner and the contractor. A subcontractor relationship exists when there are three or more parties: 1) the owner; 2) an upper tier contractor (usually referred to as the “general contractor”) hired by the owner; and 3) a lower tier (or subcontractor) hired by the general contractor. — Insurance Journal’s Academy of Insurance.
  2. In 44 states and the District of Columbia, workers’ compensation statutes make an upper tier contractor responsible for work-related injuries suffered by employees of a lower tier contractor that does not have workers’ compensation coverage in place at the time of injury. — Insurance Journal’s Academy of Insurance.
  3. ISO introduced the Primary and Noncontributory – Other Insurance Condition (CG 20 01) endorsement. This allows the lower tier contractor to extend coverage to an additional insured (generally the upper tier contractor) on a “primary and noncontributory” basis as required by many construction contracts. — Insurance Journal’s Academy of Insurance.
  4. All construction-related additional insured endorsements were altered by ISO in 2013. Wording in these revised endorsements limits coverage extended to the additional insured to the maximum amount of transfer allowed by the subject state’s indemnification (or anti-indemnification) statute — regardless of the level of transfer specified in the contract. — Insurance Journal’s Academy of Insurance.
  5. Just because the lower tier agreed to indemnify or hold the upper tier harmless for a specific act does not mean that such indemnification is protected by insurance. The subcontractor can agree to far more than is covered by insurance. — Insurance Journal’s Academy of Insurance.
  6. There were an estimated 943,000 building permits authorized for privately-owned housing units in July 2013, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The revised rate for June 2013 was 918,000 and in July 2012 there were 839,000 building permits authorized for privately-owned housing units.
  7. Thirty-seven states posted year-over-year gains in construction employment in July 2013 compared to July 2012, according to the Associated General Contractors of America (AGCA).
  8. The largest year-over-year percentage increase in construction jobs occurred in Wyoming (16.7 percent, 3,500 jobs), followed by Mississippi (12.3 percent, 5,800 jobs) and Hawaii (11.6 percent, 3,400 jobs). Texas added the most jobs over the past 12 months (33,100, 5.7 percent), followed by California (17,800, 3.0 percent) and Florida (15,700, 4.6 percent). (AGCA)
  9. Fatal injuries among construction trade workers rose in 2012 to 577 after five years of decline, according to the U.S. Bureau of Labor Statistics (BLS). This was an 8 percent increase over the 533 construction trade workplace deaths in 2011, but a 41 percent drop from the high of 977 reported in 2006.
  10. The leading causes of worker deaths on construction sites are falls, followed by electrocution, struck by object and caught-in/between, according to the BLS.

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Insurance Journal West September 9, 2013
September 9, 2013
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