Should You Cancel Workers Comp Insurance When You Lay Off Employees?

If a business downturn causes you to lay off employees, you might want to cancel your workers’ compensation insurance. Workers’ comp coverage is required when you hire someone. Without employees, it’s overhead you would like to cut.

But canceling your insurance isn’t always the best move. Here’s why.

Three Reasons Not to Cancel Workers’ Comp Too Quickly

  1. It’s hard to scale up again. Do you expect the downturn to be temporary? You will need to re-apply for workers’ comp when you hire employees again. This costs time, effort and money.
  2. You may lose valuable dividends. MEMIC, Maine’s largest workers’ comp insurer, has paid dividends several years in a row. If you cancel, your business has to wait 3 years to start earning dividends again.
  3. You may lose loss-free discounts. By canceling your policy, you lose the benefit of any loss-free discounts you’ve earned. When you re-start your policy, it takes time to accumulate those discounts again.

Cost-Cutting Alternatives to Canceling Your Workers’ Compensation Policy

  1. Reduce estimated payroll. Workers’ comp premiums are based upon payroll amounts. Layoffs mean lower payrolls, so it’s fine to reduce estimates. This may create a refund without actually canceling your policy.
  2. Change payment plans. Most workers’ comp insurers offer installment plans. Spreading payments may allow you to better match cash flow without losing benefits.

Updating your Maine workers’ comp policy may be smarter than canceling it altogether. Closing your business, or have no plans to hire for more than a year? Then it’s proper to cancel your workers’ comp insurance.

Maine Workers’ Compensation Insurance Questions?

For answers to your Maine workers’ compensation questions, contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We’re independent and committed to you.

Does Insurance Cover Loss of Business from Coronavirus?

COVID-19, better known as Coronavirus, has everyone’s attention. It’s changed behavior around the world, and now it’s here. Business owners already feel it. Their customers’ routines are completely disrupted. No more non-essential shopping, eating at restaurants or going to shows. No going out for drinks or coffee. Instead, they’re stockpiling supplies, staying home, washing, disinfecting and keeping their distance.

COVID-19 is causing turmoil for businesses large and small. Inventory control and staffing are all messed up. Marketing and sales are on hold as clients and prospects are otherwise occupied.

What if Your Business Suffers due to Coronavirus?

Many businesses feel threatened.

  • What if fear causes my customers to stay home?
  • What if I can’t get inventory or supplies?
  • What if my employees get sick and can’t work?
  • What if I have to disinfect or close my workplace?
  • What if the government restricts movement in my area?
  • What if economic fear or market changes cause me to lose sales?

Do My Policies Cover Business Interruption?

Unfortunately, business insurance is very unlikely to cover you against lost business due to Coronavirus. Even if you purchased business interruption coverage, almost every policy excludes damage caused by communicable diseases.

If Not, Why Not?

You probably don’t care about the reason behind the exclusion, but there is one. Put simply, diseases are too uncertain for insurers to accurately price insurance to cover them.

Viruses are extremely rare – or even unknown – until they’re widespread. And it’s hard to quantify a resulting drop in business. Profits and sales are subject to changing factors: weather, competition, consumer preferences. It’s very hard to put a dollar value on lost sales directly caused by a public health threat.

Resources for Small Businesses Affected by COVID-19

The US Small Business Association (SBA) has pledged to provide targeted, low-interest loans to small businesses and non-profits severely harmed by the Coronavirus.

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million. The goal is to help small businesses overcome a temporary loss of revenue.  These are loans, not grants. They must be repaid.

The CDC interim guide for businesses offers help to keep your employees and customers safe.

The Maine CDC Coronavirus information page is a good resource for Maine businesses and citizens. It contains factual and timely information about the disease and its effect on our state.

We’re Here to Help our Neighbors

We are a local business. We live and work in Greater Portland. While insurance may not be able to help our clients directly, we still want to be accessible. We want to help where and how we can.

Even if we must close or restrict access to our office, you can still reach us by phone, email or our website. Our insurance company partners also continue serving customers while keeping their employees safe.

Stay Safe

Public health scares and economic uncertainty create anxiety. Most business owners feel responsible for the safety of their employees and customers, as well as their loved ones. We hope that all or our clients, friends and business partners remain safe and calm during these trying times. We’re here to answer your insurance questions.

In this anxious season, check on family and friends. Be kind to each other. Together, we can make it through.

Independent Contractors and Maine Workers Compensation

Hiring an independent contractor a great way to expand your company’s products and services without adding overhead. The right sub can make you look good.

Subcontractor or Employee?

By Maine law, a worker is an employee unless they meet tests to be an independent contractor. That makes them subject to employment tax and workers compensation. If your Maine business hires independents, here’s what you need to do.

Get Documentation from Subcontractors

Workers compensation charges sub costs as payroll unless you have proof of subcontractor status. That can be a very expensive surprise. And the bill is due in lump sum.

Reduce Your Maine Workers Comp Costs

Certificates of insurance and WCB266s are “get out of jail free” cards. Use them to avoid a costly workers compensation insurance audit.

For more Maine Workers Compensation insurance tips, contact Noyes Hall & Allen in South Portland at 207-799-5541. We’re independent and committed to you!

What Maine Small Business Owners Need to Know About Insurance

Running your small Portland, ME business can be a rewarding and satisfying endeavor. However, without the right liability insurance coverage, running your small business open you up to lawsuits. Here is a brief description from Noyes Hall & Allen Insurance of the most common business liability insurance.

Worker’s Comp

Worker’s compensation insurance is required in Maine for any business with employees. As a business owner, you need to stay up to date on your state’s requirements concerning worker’s compensation insurance. Worker’s compensation insurance protects your employees when they are injured on the job. This also protects you as the employer from liability for said injuries.

Liability Insurance

General liability is one of the most important types of insurance for the small business owner to have. Liability can come in many forms. Individuals can get injured on your property or by your product. Something could go wrong with a service you provided resulting in damage or injury. Liability insurance will protect you in these situations and ensure that your company is not required to pay out of pocket for these types of liability claims.

Commercial Auto

If your company owns vehicles in order to provide services or deliveries, then you need business auto insurance. Commercial vehicle insurance can cover your drivers and your vehicles in the event of an accident. If your company uses vehicles, then you will no doubt have invested a good deal of money into those vehicles. This will protect that investment.

Umbrella Insurance

Commercial umbrella insurance policies help small business cover all their bases in one simple policy. Umbrella policies provide high limits of liabilty over your general liability and business auto policies. To learn more about small businesses, contact our friendly staff at Noyes Hall & Allen Insurance serving Portland, ME at 207-799-5541. We offer a choice of Maine’s best business insurance companies, so we can help you find the best value. We’re independent and committed to you.

Maine Food Truck Insurance

Food trucks have roamed the streets of Portland Maine for several years.  Now they’re popping up in places from Biddeford Saco to Westbrook, Scarborough to Freeport, Sugarloaf to Sunday River. Food truck insurance can be a challenge for an inexperienced insurance agent. Insurance companies know how to insure trucks. They know how to insure restaurants. But rolling restaurants are different.

5 Types of Insurance Every Food Truck Needs

  • General Liability  Insurance

    If someone breaks a tooth in a crabmeat roll or gets food poisoning after eating your product, they’re going to come back to you. GL coverage pays for these claims, as well as slips and falls and other injuries or damage that occur at your location.

  • Business Auto Insurance

    If you get in an accident while you’re on the move, you need to have your food truck fixed and back online soon. If you’re at fault, you’ll also need protection to pay for the damage and injury you cause.

  • Workers Compensation Insurance

    By law, you’re required to provide Maine workers comp coverage for your employees. If they’re injured at work or miss time due to an on-the-job injury or illness, workers compensation insurance pays them.

  • Business Property Insurance

    You have a big investment in your inventory, fixtures and supplies, both at the commissary and on your food truck. Insurance can protect that asset against fire, theft, equipment breakdown and more.

  • Loss Of Food Truck Income

    If your food truck is down, you have no income.  What if your fryer malfunctions, causing a fire? You could be off the road for the whole summer season. Or what if your best brewery location or outdoor venue suddenly shuts down due to a fire, windstorm or some other disaster? Business income insurance for food trucks can help you replace the income you lose following property losses like these.

Get Maine Food Truck Insurance

If you have questions about insuring a food truck in Maine, contact a Noyes Hall & Allen insurancce agent in South Portland at 207-799-5541, or click “get a quote” above. We’ve insured food trucks since they first came to Maine. We offer a choice of Maine’s preferred insurance companies, including the Acadia Street Eats food truck program by Acadia Insurance. We’ll help you find an insurance solution that fits your business and your budget. We’re independent and committed to you.

Commercial Insurance for Maine Small Business

Maine small businesses face many of the same hazards as their larger counterparts. They are also unique, and as such, they have unique insurance needs. For businesses in the Portland, South Portland and Scarborough, ME area, the agents with Noyes Hall & Allen Insurance can help you to find the right insurance policy to protect their unique operations.

Maine small businesses are not legally required to carry property or liability insurance. If your business has employees, you must carry Workers Compensation insurance, though. Smart business owners know that insurance is a cost-effective way to protect their investment in property such as inventory, fixtures and equipment. They also know that business liability insurance will protect them from lawsuits alleging negligence that causes injury or property damage.

Many business contracts require proof of insurance. These include rental agreements and leases, equipment leases, and independent contractor agreements.  A Noyes Hall & Allen Insurance agent can help you determine what kind of insurance you need and how much. They’ll help work within your budget so you don’t buy too much – or too little – insurance. For those in the Greater Portland, ME area, Noyes Hall & Allen Insurance offers the choice of several of Maine’s preferred insurers. We’re independent and committed to you. Call us at 207-799-5541.

Maine Business Insurance – How Much Does it Cost?

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

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?

 

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?

 

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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