Workers Compensation Insurance

Maine Business Insurance – How Much Does it Cost?

Posted on by Bob O'Brien

If you’re starting or running a business in Maine, your budget includes insurance. How much fire, auto or liability insurance do you need, and what will it cost? The answer varies, depending on what your business does. Restaurants pay more for fire insurance because of open flames and heat. Web designers pay more for professional insurance due to copyright infringement hazards. Breweries and other manufacturers spend more for product liability insurance. Contractors and food trucks pay more for auto insurance because they have a lot of equipment on the road.

Your business location affects your insurance costs, too. Business insurance in Portland or Southern Maine may cost more due to more congested roads, exposure to out-of-state travel and more a more litigious environment. But, business fire insurance may cost less in Portland, South Portland, Scarborough or nearby southern Maine towns due to strong fire protection.

Average Costs for Small Business Insurance in Portland Maine

The business clients of Noyes Hall & Allen Insurance, an independent agency in South Portland Maine, pay an average of:

  • $3600 for all their commercial vehicles
  • $4500 for workers compensation
  • $1400 for business property insurance
  • $2600 for business liability insurance
  • $2750 for professional liability (Errors & Omissions) insurance

Those figures include all business clients, large and small. Some clients only need business liability coverage; others need all the insurances.

What Would It Cost to Insure Your Maine Business or Idea?

If you own a business or a startup business in Maine, we can help you find out. We offer a choice of Maine’s preferred business insurance companies, so we can survey the market. We’re independent and committed to you.  Call a Noyes Hall & Allen Insurance agent in South Portland Maine, or click “get a quote” above. In the end, you’ll know how much to budget for insurance, and what kind of business insurance you need.

Commercial Insurance for Maine Business Start-Ups

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Commercial insurance is requisite for any business in the modern world, including start-ups. In fact, new businesses or start-ups have the most to lose if things go south. Therefore, it’s vital to protect yourself in the best possible way – including getting commercial insurance. In Maine, this type of coverage is not mandated, but if you are serious about running a successful business, you need to get it.

Purchasing commercial insurance might be the difference between death and survival  for your start-up. If you are planning to open a new business in The Pine Tree State and need coverage, Noyes Hall & Allen Insurance in Portland, ME is the place to look. We offer the following commercial insurance coverage options for start-ups:

  • General Liability Insurance for Start-Ups. GL pays for losses arising from settlements, claims, or lawsuits that your start-up may face due to injuries or property damage caused to third parties.
  • Professional Liability Insurance. Many creative and tech startups would face disaster if sued for copyright infringement, programming error, printing mistakes and other gaffes. Professional liability insurance protects you and your reputation by defending you and paying damages you might owe.
  • Property Insurance for Start-Ups. This covers physical assets owned by your start-up. This includes your investments in inventory, structures, equipment and company vehicles (commercial auto insurance). Damages caused by wind and hail storms, fire, smoke, collision and vandalism fall under this category.
  • Flood Insurance.  Flood damage isn’t covered by business property insurance. That’s why you need flood insurance for your start-up. Remember that flooding can occur anywhere, anytime. It helps to be covered from the resultant losses.
  • Workers Compensation Insurance. In Maine, if you have employees, you’re required to provide workers comp insurance. Your employees are an essential part of your business. Ensure that they are taken care of in case of an accident that results in injury, disability, or missed work.

Other coverage options are available, but these are the most important. Commercial insurance is the best way to make sure that your business doesn’t go under after an unfortunate event. For more information on commercial insurance from Noyes Hall & Allen Insurance in Portland, ME, call us at 207-799-5541, or visit our website to get the answers you need.

How Much Does Lawn Care / Landscaping Contractor Insurance Cost in Maine?

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Maine’s growing season is short. Landscapers and lawn care contractors only have a few months to earn money. That means they must watch expenses carefully to be profitable. Too much overhead can be the difference between profit and loss for a Maine contractor. 

How Much Does Landscaping Liability Insurance Cost?

Prices vary depending on:

  • Whether you specialize or not – pesticide or heavy tree work specialists pay more for insurance.
  • How much experience you have – seasoned businesses with good experience pay less than start-ups.
  • How much you make – higher revenues means higher insurance costs. 
  • If you plow in winter – If you take on lots of commercial plowing jobs, you’ll pay more for coverage.

If you’re a single operator in Maine with a mower or two, you’ll probably pay less than $1500 a year. If you have heavier equipment to insure, you’ll pay a bit more.

 Do I Need Workers Compensation Insurance for My Landscaping Business?

If you have employees, yes. If not, you may or may not have to buy workers’ comp, depending on the legal setup of your business. For example, if you’re a “dba”, you can choose to cover yourself under workers compensation, but you’re not required to.

 

Related Post: Who Needs to Buy Workers’ Comp Insurance in Maine?

 

How Much Does Lawn Care Equipment Insurance Cost?

You can insure tools and equipment like deck mowers, weed trimmers, hand mowers and hedge trimmers on a contractors package policy. The price varies with the value of the equipment. It usually costs less than $3.00 per $1,000 of value. Some policies offer replacement cost coverage (new for old). Other policies cover depreciated value. Ask your agent what they’re quoting.

How Much Does it Cost to Insure My Landscaping Truck and Trailer?

Business vehicle insurance costs more than personal. For a brand new 1/2 ton pickup, budget about $1500 per year – more if you plow commercially. Even though it’s more expensive, it’s still a good idea to buy the business policy. You want to be covered properly.

Related Post: Should a Maine Contractor Insure Vehicles in a Business Name?

 

Can I Store My Lawn Care Stuff in My Garage at Home?

Storing fuel or equipment in an outbuilding  can VOID COVERAGE for that building on your homeowners policy. If you have gas cans and mowers in your detached garage, and a fire starts, destroying the garage, your homeowners policy will NOT cover the rebuilding cost – even if the mowers or fuel had nothing to do with the fire.

Talk to your homeowners insurance agent about how your policy deals with this. Another option: insure your garage on your contractors policy. You want to make sure you have insurance help to rebuild after a disaster.

Have questions about contractors insurance for Maine landscaping or lawn care business? If you live and work in the Portland Maine area, call a Noyes Hall & Allen Insurance agent at 207-799-5541. We represent many insurance companies, so we can recommend the best value. We’re independent and committed to you.

Who Needs to Buy Workers Comp Insurance in Maine?

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Maine law requires every business to provide workers compensation insurance to protect its employees. Workers comp pays for medical expenses and lost wages following an on-the-job injury or occupational disease.

Is There a Minimum Payroll for Maine Workers Comp?

No. As soon as you hire your first employee, you’re required to provide workers’ compensation insurance. It doesn’t matter how much or how little they work, or what their hourly wage is. The only exceptions are employers of domestic servants in a private home, or agricultural employers who meet certain requirements.

 

 

Do I Have to Buy Workers Compensation for Independent Contractors in Maine?

No, but the eligibility bar for an independent contractor is VERY high in Maine. Maine law sets 12 tests for an independent contractor. The tests deal with supervision and control. How many do you have to meet to qualify? All twelve.

Related Post: Independent Contractor or Employee?
Maine Workers Comp Insurance Costs Hang in the Balance. 

If there’s any question in your mind whether or someone is a contractor or an employee, chances are good that they’re an employee. To avoid unplanned expenses, we recommend applying for a Pre-determination of Independent Contractor Status (WCB-266) with the Maine Workers Compensation Board.

Are Business Owners and Partners Required to Buy Maine Workers Comp Coverage for Themselves?

They’re not required, but whether they’re automatically covered or not depends on the type of legal entity.

Sole Proprietorships and Partnerships – Owners are not automatically covered, but they may “opt in”. Parents, spouses and children of an owner who work in the business are automatically covered, but may “opt out” by signing a form.

Corporations and Professional Associations – Officers who work in the business are automatically covered and included at their actual payroll (subject to minimums and maximums). If they own less than 20% of the stock, they cannot be excluded.

An owner of 20% or more of voting stock may “opt out” of workers comp by signing a form. Spouses, parents and children of these owners may also be excluded, even if they’re not household members.

Charitable, Religious or Non-Profit Corporations – Executives are not considered “officers”. If they are paid wages, they are covered by workers compensation. They may not “opt out”. If they are not paid, they are considered volunteers, and not covered. Volunteers do not have the choice to “opt in”.

LLCs – Owners are excluded unless they “opt in” to coverage. Parents, children and spouses of owners are automatically covered, but may “opt out” of workers comp.

Owners of 50% or more of separate businesses MUST be on the SAME policy, even if the two businesses have different legal forms (e.g. a partnership and a corporation).

What’s the Penalty for Not Having Maine Workers Compensation Coverage?

That’s a risk you don’t want to take. Here are a few of the downsides:

  • It’s a Class D crime, subject to a $10,000 penalty or 108% of the premium you should have paid (whichever’s larger);
  • You can lose your corporate charter or other state licenses;
  • You’re solely responsible for the medical expenses and lost wages of your employees (regardless of fault or contributory negligence);
  • Your liability and other insurance offer no protection against this.

If your business hires an employee, you need Maine workers compensation coverage. Call Noyes Hall & Allen Insurance at 207-799-5541 for a free consultation and quote. We can help you manage your workers compensation and other Maine business insurance costs. We represent several top Maine business insurers, including MEMIC, the largest workers compensation insurer in Maine.

We’re independent and committed to you.

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How to Save Insurance Costs and Win More Jobs Under Maine’s New Independent Contractor Law

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Effective January 1, 2013, a new Maine law makes it harder for workers to be considered independent contractors, and more likely for them to be considered an employee. If you consider yourself to be a Maine independent contractor, or are a Maine business that hires such people, paying attention to this can help you get more work – or save money for your business.

For Independent Contractors

home under construction If you want to be considered an independent contractor in Maine, you can either buy Maine workers compensation insurance or obtain a Maine Predetermination of Independent Contractor Status (WCB266), proving that you meet 5 criteria, and at least 3 of another 7. Otherwise, you are presumed to be an employee.

With this pre-determination in hand, or by buying your own Maine Workers Comp coverage, you have a big jump on your competition. Companies that hire you won’t have to pay Maine Workers Compensation premium on your work, reducing their costs. This puts you at a significant advantage against your competitors seeking the job. Make sure you provide a Certificate of Workers Compensation Insurance or a copy of your approved WCB266 when you bid for work.

Predetermination (WCB 266) forms are good for one year, so be sure to re-apply every year. Also, they are “portable; you can use the same form can for multiple jobs in the one year.

For Maine Employers

To reduce your Maine business insurance costs, obtain a Certificate of Workers Compensation Insurance or a Predetermination of Independent Contractor Status (WCB266) from each contractor you hire. Consider it a “get out of jail free” card against paying more premium on your workers compensation insurance audit.

Be sure to collect this proof BEFORE the job starts, because Predetermination forms are NOT retroactive.

For more business tips on navigating Maine Workers Compensation insurance, contact a Noyes Hall & Allen agent at 207-799-5541. We’re independent and committed to you!

When an Employee Layoff Goes Bad

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Bill runs a café on the West Side.  Since a nearby hi-tech facility had a major layoff, lunch business has dropped 25%. In fact, Bill had to let Willie, one of his waiters go last week. Now, Bill’s wife Elaine stands in the kitchen with a concerned expression on her face and an official-looking letter in her hand. Willie hired an attorney and filed a lawsuit alleging wrongful termination and discrimination.

Elaine calls the café’s insurance agent. Good news! Bill & Elaine followed their agent’s recommendation by adding Employment Practices Liability Insurance (EPLI) to their portfolio of coverage last year. When the agent explained that the average cost of defending a groundless lawsuit is $20,000, they knew they couldn’t afford the risk. Their agent explained that the insurance company would respond on their behalf, hire a lawyer if necessary, and pay any damages if they are found liable. Bill and Elaine just avoided a huge expense  one that could have forced them to close their business.

Are you smart, like Bill and Elaine? Has your insurance agent recommended EPLI coverage to you? If not, you might consider:

5 Myths About Employment Practices Lawsuits

1. Employee Lawsuits Are Rare

Employment related lawsuits happen more than you think. Six in ten employers in the U.S. have faced an employment-related lawsuit in the past 5 years.

2. Only Large Employers Get Sued For Employment Practices

Nationwide, more than 40% of employment-related practices claims are brought against employers with fewer than 100 employees.

3. Employee Lawsuits Don’t Happen in Maine

Think again. The Maine Human Rights Commission or Maine Workers’ Compensation Board handle more than 800 employment-related practices complaints every year.

4. It’s Covered by Liability or Workers’ Comp Insurance

Unless you have specifically purchased EPLI coverage, the costs of defense or damages are NOT covered by standard Workers Comp, General Liability or Professional Liability insurance policies.

5. EPLI Insurance is Expensive

Depending upon the type of business you operate, Maine Employment-Related Practices Insurance costs as little as $30 per employee per year – or $0.58 per weekly payroll period.

 

What does EPLI Cover?

  • Legal Representation to defend you against claims from current, former or prospective employees, including:
    • discrimination (age, sex, disability, race, religion, etc.)
    • wrongful termination
    • sexual harassment or hostile work environment
  • Damages you’re legally obligated to pay.
  • Court costs and related expenses.
  • Some policies also offer counsel with an employment law professional to help you during the hiring employment and termination process.

If you have employees, your business is at risk. For answers to your Maine employment liability insurance questions or Maine workers compensation insurance questions, call Noyes Hall & Allen at 207-799-5541.

 

Pay As You Go Maine Workers Comp Insurance

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Workers Comp – A Cash Flow Challenge for Your Business

Paying workers compensation insurance can be a cash flow challenge. In slower months, it’s hard to scrape cash together for that quarterly payment. It’s also hard to estimate a year ahead what your payroll will be. Over- or under-estimating payroll at the beginning of the policy year creates a big year-end audit adjustment. You either get a big bill, or a big refund of money you could have been using to run your operation all year.

Pay As You GoWorkers Comp Integrated with Payroll

Maine employers have a cash-flow friendly option for paying their Maine workers compensation insurance. MEMIC, Maine’s largest workers’ comp insurer offers “Comp-As-You-Go”. This workers comp billing integrates with virtually every payroll provider, including ADP, Paychex, Advantage, Bangor Payroll, and many more. It also works with Quickbooks software.

How Does Pay-As-You-Go Maine Workers Comp Insurance Work?

It’s simple to understand, and easy to start up. Pay-As-You-Go:

  • Integrates with payroll services or QuickBooks software. Just fill out a form with your payroll info.
  • Allows you to keep your current payroll process and frequency. Simply send a file after every payroll run (weekly, bi-weekly, bi-monthly or monthly).
  • Requires no premium deposit.
  • Payments are automatically withdrawn by MEMIC.
  • You can leave the pay-as-you-go plan any time during the policy term.
  • Avoids year-end audit bills and surprises.
To learn more about payroll service integration with Maine workers comp insurance, contact Noyes Hall & Allen Insurance at 207-799-5541.

Maine Workers’ Compensation Insurance Forecast and Recap

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The National Association of Insurance Commissioners (NAIC) recently released their annual report of  Workers’ Compensation results, and the picture isn’t pretty.

Payroll Reductions
Maine business insurance agents already know that their clients struggled to balance expenses with revenues reduced by the recession. Between layoffs, furloughs and attrition, reduced payrolls caused U.S. workers’ compensation premiums to drop 11.4% from 2008 to 2009.  While a slight reduction in rates caused some of that decrease, most of it was payroll-driven.
New England fared slightly better than average, with a 10.8% decrease. Our state actually did better than New England. Maine workers compensation insurance premiums were 10.2% lower in 2009 than 2008.

Workers Compensation Overall Premium Change, 2008 to 2009
click to enlarge map

Increased Losses
The workers’ compensation loss ratio (losses incurred to premium earned) increased nearly 7% in 2009. Although not uncommon during an economic recession, this is not a positive sign for the health of the workers’ comp insurance market. The New England states’ pure loss ratios were worse than average, at 73.1%.  Maine’s pure loss ratio was better than the New England average, but worse than the national average, at 70%.

Workers' Comp Pure Loss Ratios by State, 2009
Click to enlarge map

The Maine Workers’ Comp Forecast
Most insurance analysts believe that the workers’ comp market is in a precarious position. Relatively good loss ratios are deteriorating, and the uncertainty of national health care reform, medical cost increases, and employment and economic growth (or lack thereof) concern underwriters. The result may be upward pressure on Maine workers’ comp rates over the next few years. That’s bad news for employers.

If you have questions about your Maine workers comp experience modification, workplace safety, or workers’ compensation insurance in general, contact Noyes Hall & Allen Insurance at 207-799-5541.

Independent Contractor or Employee in Maine

Posted on by Bob O'Brien

Workers’ Comp Costs Hang in the Balance

(Note: Maine law regarding independent contractor or employee changed January 1, 2013. This post from March, 2010 remains accurate. For the most up-to-date information, see “How to Save Insurance Costs and Win More Jobs Under Maine’s New Subcontractor Law“. )

What’s the difference between an independent contractor or employee? It’s the Maine workers comp insurance question that’s worth a lot more than $64,000: Guess wrong and you could end up with a huge Maine workers comp audit bill from your insurance company.

Independent Contractor or Employee – Why it Matters

Maine workers comp policies pay the costs of medical and lost time damages for employees. Who’s responsible if a worker is hurt on the job? Contractors are not responsible for injury costs for independent contractors; the independent should buy their own workers comp insurance to protect themselves and their own employees.

Independent contractor or employee? It's an important question in Maine.

Up to Now
Until recently, Maine workers comp insurance agents instructed their contractor clients to obtain certificates of workers comp insurance from subcontractors. Then, when the insurance company conducted the Maine workers comp audit, the premium auditor would exclude the subcontracted cost when calculating workers compensation premium. This was an effective cost and risk control technique.

Maine Independent Contractor or Employee: a New Definition

A new Maine law, effective January 1, 2010, (P.L. 2009, Ch. 452) sets a new standard for defining an independent contractor in the construction industry. It says that a person is presumed to be an employee unless that person meets all 12 parts of a new definition of independent contractor.

Contractors must pay Maine workers compensation insurance (by reporting the payroll to their workers comp insurer) for anyone who does not meet that new definition. Moreover, the employer must get pre-determination before each job starts, or all workers are considered employees.

Best Practices for Employers

Under  PL 2009, a contractor must obtain either:

  1. A Maine workers compensation certificate of insurance for the independent showing that coverage was in force for the duration of the job; or
  2. “Predetermination of Independent Contractor Status” from the Maine Workers Compensation Board. This predetermination is not binding – an injured worker might still be shown to be an employee after the fact – but it allows the contractor to presume that the worker is an independent contractor, and thereby not purchase Maine workers compensation insurance on their behalf.

The Maine Workers Comp Board does not approve predetermination requests retroactively; the contractor must have the determination letter as of the date the work begins. Moreover, the Maine Workers Compensation Board took the position that a predetermination is required for each and every job that the independent does, regardless of the scope or duration of the job.

Needless to say, this is proving to be a hardship for general contractors and independents alike. The contractor’s typical job is short-notice, and independent contractors are often hired on the same day, leaving no time for a predetermination request to work its way through the Workers Compensation Board. Contractors are paying higher workers compensation premiums to include independent contractors, or risk losing the work due to delays.

Emergency Legislative Relief Considered

The 124th Maine Legislature has taken up LD 1815, in an attempt to clarify subcontractor status and to ease the burden on the day-to-day operations of contractors. While a Predetermination of Independent Contractor Status would still be required, the predetermination would be valid for one year. At least a contractor would not have to have this predetermination for every job. They could keep this form in their files and thereby exclude the independent’s payroll from their workers compensation rating.

We believe the proposal to require a predetermination on an annual basis is a step in the right direction. We hope the Maine Legislature agrees.

For More Info about Maine Workers Compensation Insurance

For more information and advice about Maine business insurance, contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. As an independent agency, we offer a choice of many of Maine’s preferred business insurance companies. That means we can compare insurance options to help you find the best fit for your business.

In other words, we’re independent and committed to you.

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