We pay around 11% of payroll for WC.
Depending on the job, cutting 5% of the total bill is too much. Labor usually accounts for 30% of my job cost with 30% going to materials and equipment, then 10% for O&P. Of course this varies job to job depending on what the project involves.
A single owner/operator can opt out of WC through the state here in AL. This is acceptable to most insurance companies and GC's if it's a true one owner/operator company.
As far as them cutting an additional 5% for GL, that's BS. They should've made the insurance requirements part of the contract before signing.
I have one large GC that I work for that requires specific job site endorsements. These endorsements usually run $700-1500 per project. Instead of absorbing that cost into the bid, I just include a single line item for the insurance on my bid.
Same with an umbrella policy. Most of the GC's I work for do not require it but on occasion I do run across the requirement. If I get the bid and the insurance requirements were not specifically spelled out in the bid documents, I negotiate the additional insurance costs into the contract or not sign the bid.
The reason for my post is that I have a $1 million liability policy through progressive. Costs $300 a month.
One of my customers deducted 5% from my bill for liability insurance. I called and asked him why he deducted insurance from my bill. He said his insurance required me to have more and being that I didn't meet their requirements they would bill
Him 5% of every invoice I turned in. Also told me that I needed to supply him with proof of workmans comp. but he knows I don't have it. I told him no I have medical insurance for my self so I felt I didn't need workmans comp. he told me that was not sufficient for his insurance. That I needed an actual workmans comp policy or he was gonna have to deduct 5% for it also. Well the only way I can pay for this stuff is to raise my rates. So I'm trying to figure out about what I will have to go up.