Below are some of the common questions we are asked.  If you don't see your question here, feel free to contact us and we'd be happy to help out.


What are the benefits of Worker’s Comp for my employees?

If any of your employees are injured on the job, or become ill due to work related activities they will receive:

  • Payment for their medical treatment,
  • Payments for their lost wages while they recover,
  • Payment for any permanent disability resulting from their injury, and
  • The cost of retraining if the injured employee is unable to return to the same job he/she had prior to their injury.

Do I have to provide Worker’s Comp?

Most states require employers to provide coverage, issued by a worker’s comp insurance company, for their employees.  Generally, if you have employees, you need to purchase worker’s comp for them.

What can I do to make sure my subcontractors have Worker’s Comp? What are my responsibilities if they don’t?

Any subcontractor or independent contractor who has employees is required by law to provide worker’s compensation coverage for them. Make sure you obtain a certificate of insurance (COI) from each of your subs showing their worker’s comp policy number, effective and expiration dates and the name of the insurer. Be sure to ask for a new COI before the expiration date shown in the current COI. If a subcontractor cannot, or will not provide a COI from their worker’s comp insurer, we recommend you consider not doing business with that sub. You could be held responsible for injuries to their employees; injuries for which you have no coverage.

Can my subs sue me for work-related injuries?

Independent contractors do not have the option of suing their general contractor. The only way to do so requires them to prove their injuries are due to the general contractor’s negligence or breach of their legal duty. Even so, benefits are not guaranteed to independent contractors.

Are my subcontractors or independent contractors covered under my Worker’s Comp?

Independent contractors and subcontractors are NOT eligible for worker’s compensation coverage and employers are not required by the states to purchase coverage for them.

How long do Worker’s Comp benefits last?

Each state determines the length of time payments can be paid for a work-related injury or illness. Generally, time limitations range from three to seven years. However, there is usually no limit to the length of benefits for a permanent disability with the exception: some states will not allow further payments when the injured worker reaches age 65.

How much does Worker’s Comp pay?

The amount an injured worker receives is based on a percentage of that worker’s wages. While rates vary by state, in many states the percentage is 66 2/3%.

What does Worker’s Compensation insurance cover?

Worker’s Comp, as it is commonly known, covers five basic things: (1) Medical expenses, (2) Disability benefits, (3) Lost wages due to (4) work related injuries, or (5) work related illness.

What is an Excess Liability Policy?

A policy issued to provide limits in excess of an underlying liability policy. An excess liability policy is no broader than the underlying liability policy; its sole purpose is to provide additional limits of insurance.

What is an Umbrella Policy?

A Commercial Umbrella Policy is a policy designed to provide protection against catastrophic losses. It is written over various primary liability policies, such as the commercial general liability (CGL) policy among others. The umbrella policy serves three purposes: it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims; it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and it may provide protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).

What is an occurrence policy?

A policy covering claims that arise out of damage or injury that took place during the policy period, regardless of when claims are made. Most commercial general liability (CGL) insurance is written on an occurrence form.

What is a risk retention group?

A Risk Retention Group, or RRG, is an alternative risk transfer entity created under the federal Liability Risk Retention Act of 1986. RRGs must form as liability insurance companies under the laws of one state, but may do business in all 50 US states as long as they insure only members of the same group. One advantage of being a member is the RRG's dedication to each member, which can result in long-term stability as well as broader coverage than may be available in the more standard marketplace.

What is personal and advertising injury?

Combined with standard Commercial General Liability insurance, Personal and Advertising Injury provides, in general, coverage arising out of the following offenses: false arrest, detention or imprisonment, malicious prosecution, invasion of privacy as well as slander or liable.

What is products / completed operations?

Completed operations, sometimes called "construction defect insurance," covers the liability of a contractor for bodily injury or property damage to others arising out of his or her construction operations once all work has ceased and a project is deemed completed. To learn more, go to CAN'T ALWAYS MAKE LEMONADE WHEN LIFE HANDS YOU  LEMONS?

What is a certificate of insurance?

A Certificate of Insurance, or COI, verifies that an insurance policy is in force. It usually contains the types and limits of coverage, the name of the insurance company, policy number and dates coverage is in effect. It also lists the name of the insured policy holder as well as the person or organization requesting the COI. A COI does not provide coverage and cannot be used to change a policy. To learn more, go to CERTIFICATES OF INSURANCE: WHAT COULD GO WRONG?

What if my subcontractor doesn’t have insurance?

If your subcontractor doesn’t have his or her own General Liability, you can be held liable for claims made against the subcontractor.  This is because the General Contractor is considered to be in charge of the worksite, and therefore, is responsible for the safety of the public at that site.  Beware of policies sold by some insurance companies that exclude claims arising out of the work performed for you by subcontractors.  See our General Liability page and Beware the Subcontractor gap to learn more.

What costs should be included in my subcontracted work estimates?

Use the TOTAL COST of construction excluding the cost of land and your profit.  Include the cost of materials.

What is primary and noncontributory?

This principle applies when your General Liability policy is required to pay a claim before any other applicable policy (primary) and without seeking contribution from any other policy (noncontributory) that also claims to be primary.

What is waiver of subrogation?

A Waiver of Subrogation is a provision in most contracts where one party agrees to limit the rights of its insurance company to seek reimbursement for a loss from another party’s insurance company.

What if I am not Additional Insured, or don’t have a contract or a hold-harmless?

Even if the contract with your subcontractor contains a properly worded hold-harmless, without you being Additional Insured on your subcontractors’ policies, your policy can be brought into any suit resulting from your subcontractors’ negligent acts while working for you. Without a contract in which your subcontractors are clearly holding you harmless, your General Liability insurance company may have to cover the loss and defend you if you are sued. They may seek reimbursement from your subcontractors’ insurance companies, or the subcontractors themselves. Your insurance premium could increase due to the greater exposure. Your insurance company may even decide not renew your coverage. (Please consider consulting an attorney if you need assistance in drafting contract language.)

Why should I be Additional Insured on my subcontractors’ policies?

When you require your subcontractors to list you as Additional Insured on their General Liability policies, you become entitled to insurance coverage benefits under their policies. Additional Insured status is most often used in connection with an indemnification agreement, also known as a hold-harmless clause. Hold harmless clauses are common elements of a properly executed contract between you and your subcontractors. Under a hold-harmless, your subcontractors agree not to hold you responsible for their negligent acts which may have happened while they are working for you. For example, if your painter over-sprays several cars parked near the three-story townhouse your are building, the painter’s policy will respond to the claims made by the owners of the cars. If you are brought into a lawsuit filed by the car owners, the painter’s insurance company will defend you.


What is an additional insured?

An Additional Insured is a person or organization that, like you, enjoys the benefits of being an insured under your policy.  An additional insured cannot make changes to your policy.

Will my policy be canceled if my membership becomes inactive?

Not necessarily.  That will depend on why you become inactive.  If something happens that compels you to put your business on hold for a time, such as a serious illness of a family member, or yourself, and you intend to resume operations as soon as possible, we will work with you.

Will my policy be canceled if my membership is canceled?

Unfortunately, yes.  The RWC Insurance Advantage is available exclusively to members of RWC.  Failure to maintain membership makes you ineligible for General Liability insurance.  We can still provide Builders Risk and Contractors Equipment coverage.

What should I do if my homebuyer refuses a warranty?

You will be asked to warrant the home for the home buyer.

Will my policy be canceled for not enrolling homes?

No, but we will reserve our right to nonrenew your policy if you continue to refuse to enroll all your homes.  The reason is this:  Any home you build can have a construction defect claim.  RWC does not have to pay a claim if the home is not under warranty.  With a General Liability claim, we are insuring your business against claims, or suits brought by others regardless if the home is under warranty or not.  If it is a covered loss, we have to pay it.  Many liability claims start out as warranty issues such as no flashing around windows leading to water intrusion.  If that is taken care of during year one or two of the warranty, the lack of flashing can’t turn into a serious property damage claim later.  Your policy includes a self-insured retention that obligates you to pay up to $50,000 for any construction defect claim on a home that was not warranted if RWC was willing to provide the warranty.

Will my rates increase?

Insurance is no different from any other product, or service you purchase; it has costs.  These include costs for claims paid and various operating expenses.  Typically, these loss costs are reviewed annually and may increase, or decrease depending on loss experience for your classification of business.  Other factors having to do with your own business can help determine your rate.  For example, your use of a formal safety program can earn you up to 25% off the cost of your insurance.  Also, with our Claims-made policy, our costs are less during the first five years of coverage because of the way a claim is made (see “What is the difference between Claims-made and Occurrence?”).  For this reason, your Claims-made premium starts out in year one lower than an Occurrence policy, but increases gradually through year five until it is roughly equal to an Occurrence rate.  Your cooperation with audits, claims and your timeliness in paying installment premiums can all contribute to how much you pay.

What is the difference between Claims-Made and Occurrence?

The difference is when coverage is “triggered.”  With an Occurrence policy, coverage is triggered when a claim for bodily injury or property damage to others “occurs” during the policy period and that claim is reported, or made at any time during the term of coverage or after.  With a Claims-made policy, the claim must also occur during the policy period, but can only be “made” during the term of coverage of the policy that is in effect when the claim is made.  With most claims-made policies, no claim can be made more than 60 days after coverage ends unless the insured purchases an extended reporting period, or “tail” that will cover claims that happened during the coverage term, but are made months and even years later.  With the RWC INSURANCE ADVANTAGE Claims-made policy, you DON'T HAVE TO WORRY about not being covered for claims that happened, but were not reported in time, BECAUSE our Claims-made policy includes an UNLIMITED supplemental extended reporting period, or SERP (sometimes called a “tail”) that covers claims that occurred between the first day of your coverage (known as the retroactive date) and the last day of coverage REGARDLESS OF WHEN THE LOSS IS REPORTED.  The limits available on your last policy with us will respond in the event you suffer a covered loss. See our General Liability page to learn more.

What does Contractor’s Equipment cover?

Contractor’s Equipment insurance covers the direct physical loss or damage to mobile machinery and equipment that is used in your construction business. Perils such as fire, vandalism and theft, among others, are provided for owned, rented, leased or even borrowed equipment.  See our Contractors Equipment page to learn more.

What does Builder’s Risk cover?

Builder’s Risk insurance protects your insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure in the event such items are lost, damaged or destroyed by a covered cause of loss.  See our Builders Risk page to learn more.

What Does General Liability Cover?

General Liability covers you for a variety of claims involving members of the public including bodily injuries, damage to their property, personal injury associated with your advertising, website, etc., that arise out of the operation of your business.  See our General Liability page to learn more.

Why Is RWC Membership Necessary?

To be eligible for General Liability insurance in the RWC Insurance Advantage, you must be a home builder who is a member of Residential Warranty Company, LLC (RWC).  Coverage is provided by Western Pacific Mutual Insurance Company, a Risk Retention Group. Western Pacific, as a risk retention group, exclusively insures only members of  RWC. Please see What Is a Risk Retention Group for more details.

For more information on membership, click here to visit RWC Warranty Company's website.