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New California Laws Discourage Illegal Contracting Practices

January 8, 2012 By

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The changes in California law are intended to protect honest contractors.

The California State Assembly recently passed two measures intended to end the practice of what has come to be known as “black market contracting.” According to Aqua Magazine online, these laws specifically target contractors who “skirt workers compensation insurance.”

The first measure, AB 397, “requires contractors claiming workers’ compensation exemptions to recertify their status or supply proof of insurance whenever they renew their licenses.” The second measure, AB 878, “requires insurers to report client companies underreporting salaries to the Contractors State License Board (CSLB).”

Both laws are intended to address illegal contracting practices that have hurt consumers as well as “law-abiding contractors who have struggled to compete against those who cut corners by not properly insuring workers.” They also come at a time when the CSLB is cracking down on unlicensed contractors through sting operations. Aqua Magazine reports that in November, the Statewide Investigative Fraud Team (SWIFT) unit of the CSLB “arrested eight illegal contractors [in] Murrieta” and that “similar operations netted 113 violators in eight other cities.”

California is, of course, not the only state to face this dilemma, nor is the problem endemic to just one industry: “illegal contracting practices have [plagued a variety of] markets all over the country.” The recession that began in 2008 has only made the situation worse, especially in unstable economic climates like the one that has characterized the Golden State.

If you are a California contractor who is unsure if your own liability coverage meets the requirements, contact the experts at Statewide Insurance. They’ll help you understand the changes so that you can take care of your workers—and ultimately, your business—the right way.

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on contractor’s insurance.
Filed Under: California Workers Compensation Insurance Tagged With: , , , ,

Negligence or Pollution?

December 1, 2011 By

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If you're a California contractor, understanding environmental issues is a vital part of general liability insurance.

The Thomson Reuters News & Insight website reports that the California state Supreme Court recently ruled that “a commercial general liability policy’s pollution exclusion barr[ing] coverage of third-party damages from environmental pollution also governed first-party property insurance policies.”

The case involved the Villa Los Alamos Homeowners Association (VLAHA); Cal Coast Construction (CCC), a firm the VLAHA had hired to do property maintenance work; and State Farm, the VLAHA’s insurer.

In a residential building that the VLAHA operated and managed, CCC scraped the acoustical ceilings and stairways, causing “asbestos fibers to be released into the air, individual units, and the building’s indoor and outdoor common areas.” As a result, “a local environmental agency ordered the association to perform comprehensive cleanup of the building.” The total cost came to $650,000.

The VLAHA complied, but asked State Farm to cover expenses. The insurer refused, citing a pollution exclusion in the VLAHA’s policy “which covered both first party robbery losses and third-party business liability claims.”

The association won a negligence suit against the CCC and was awarded $600,000. But it lost another suit it filed against State Farm for “breach of contract and bad faith.” VLAHA argued that “a one-time ordinary act of negligence failed to constitute environmental pollution.”

The California Supreme Court ruled that State Farm was within its rights to refuse payment because the work CCC had done for VLAHA “occurred over several days and resulted in sufficient release of asbestos fibers into the air contaminate the building complex in the adjacent outside areas, constituting environmental pollution.”

Statewide Insurance Brokers provides general liability insurance. Call us today with questions and to get fast, free quotes.
Filed Under: California General Liability Insurance, General Liability Insurance Tagged With: , ,

California Independent Contractor Classification Law

November 14, 2011 By

Do you operate a business in California that retains independent contractors? If so, you need to be aware of a new state law that, according to the Monterey Herald.com, “penalizes businesses that ‘willfully misclassify’ employees as independent contractors.”

California workers comp

Knowing California independent contractor laws includes acquiring the proper liability insurance and workman's comp insurance if needed.

Under current law, businesses that engage in this kind of misclassification “are subject to consequences, including liability for payroll taxes, unpaid unemployment insurance contributions and penalties for failure to secure workers’ compensation coverage.” Moreover, “because the misclassified individuals have not been paid pursuant to wage and hour laws,” they are often entitled to overtime pay as well as compensation for “missed meal and rest periods.”

Many business owners believe that if they have an independent contractor agreement with the worker, they are in compliance with law. However, such an agreement alone does not necessarily determine whether a worker is an independent contractor. As the Monterey Herald.com further reports, “the most important factor is whether the business has control or the right to control worker as to the work done and the manner and means in which it is performed.”

Under Senate Bill 459, which will go into effect on January 1, businesses will be subject to hefty fines ranging from $5000 to $25,000 per violation if they:

  • willfully misclassify a worker as an independent contractor or
  • charge a person who has been “willfully misclassified as an independent contractor a fee or make any deductions for compensation.”

This new law interprets “willful misclassification” as “voluntarily and knowingly misclassifying” an individual as an independent contractor.

The message behind Senate Bill 459 is simple. If your California business uses independent contractors, be careful how your categorize them in your records: misclassification could cost you a bundle.

If you have independent contractors or operate a business yourself, be sure you are in compliance and secure the proper general liability insurance or workers compensation as needed. Call Statewide Insurance Brokers at 888-258-0272 for a fast, free quote!
Filed Under: California General Liability Insurance, California Workers Compensation Insurance Tagged With: , ,

Commercial Liability Insurance CA—Protecting Yourself and Your Clients

August 1, 2011 By

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In San Francisco, Los Angeles, San Diego, Sacramento or anywhere in California: Your best bet is Statewide Insurance Brokers

When it comes to commercial liability insurance, California has a lot to offer. Your business needs protection from anything that might happen and the insurance laws are very different in California, which is why you need a company that understands the issue of commercial liability coverage in this state specifically. California is home to earthquakes, fires, and a growing demand for commercial professionals because of the ever-growing population. When you are setting up shop in this state, you need to make sure that you’ve got the right insurance coverage no matter what business you are in.

Commercial liability insurance companies’ offer allows you to be protected no matter what you are dealing with. If you are working on a client’s project and something happens to their property, you are covered. If you have clients who are injured on your property, you’re covered. It’s all about finding the right insurance, but not having this coverage isn’t an option at all. You need to remember to research your options and find the best liability policy that you can. It’s also important that you find specific commercial insurance brokers because you need someone who understands your unique needs to help you get the best protection.

Independent agents are a great resource for your insurance needs when you are shopping for commercial liability insurance in California. You should look for experienced professionals who understand exactly what your needs are and how they can best be served. Nothing is more important than the safety and protection of your business, which is why commercial liability coverage is so important. You really owe it to yourself to find the best insurance and the best agents so that you can get the coverage and support that your business deserves.

Commercial liability insurance, California contractors insurance, and other types of commercial coverage are popular among the ever-growing construction industry in California. If you need this type of insurance coverage, you don’t have to look far. Just make sure that you do whatever it takes to get the most from your policy. Without this protection, you are putting your business at unnecessary risk for damage claims, financial stress, and other major issues. It just makes sense to get coverage, along with any other commercial insurance that you need, so that your business is always protected. In California, there are many different options to choose from and finding the right solutions will be up to you.

To get fast quotes on commercial liability insurance in California, as well as Nevada, Oregon, Texas, Virginia and Minnesota, call Statewide Insurance Brokers at 888-258-0272.
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