New Insurance requirements crippling small companies
When the Board of Supervisors passed Resolution 652-14 in October of last year, few, if any of the Board realized the consequences of their action.
The “revised” Resolution set minimum insurance standards for contractual agreements with the County. According to County Administrator, Jim Marquette, the County had been too lax for many years in following and enforcing insurance requirements on many contracts. The new Resolution not only firmed up insurance requirements for bidders, but also increased the necessary insurance for all forms of liability.
In doing so, a long list of local businesses were precluded from either re-bidding, or being competitive on county contracts....
County Highway/Buildings and Grounds Superintendent, Kevin Rooney, said bids for services to his departments are coming in 20-25% higher than past years.
According to Wayne County Sheriff, Barry Virts, who sits on the Community Service Board for Wayne County, several not-for-profit contractors have also expressed concerns about bids with Wayne County.
According to Times columnist and Wells Insurance owner, Chuck Wells, “Everything looks ok except requiring the $2 million Excess Umbrella policy. That is what is costing the big bucks , but it gives the county a total of $3 mill protection from lawsuits. This is not an unusual requirement for today’s larger contracts but is costly to the small business owner who usually only carries $1 million of coverage.
The high cost of liability insurance for contractors is because of a labor law in New York that allows injured workers to collect not only under worker’s comp. but also sue the General Liability policy.
We are the only state left with this law because the New York City Democrat lawyers are reaping millions from lawsuits and they don’t want to give that up so refuse to change the law.
If this continues, only large contractors will be able to afford insurance and the small guys will be forced out of business,” said Wells.
Wells added that it would be impossible for the ‘self-insured’ county to waive, or absorb the loss of a major lawsuit. “I have seen some contractors hit with umbrella coverage as high as $5 million dollars for some bids. Wayne County’s insurance requirements are reasonable,” he concluded.
County Attorney Dan Connor agreed. He said in the litigious society in which we now live, it would be reckless on the County’s part to either waive or reduce the insurance coverage required. He stated that for the longest time the County did not keep a stringent policy and exposed the taxpayers to the risk of a major lawsuit.
Wells suggested that in the future, allowing bids that separate out additional insurance costs required by the county, could be a way of balancing the bid process.