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Part 2 of The Industry Risk Series: Smart Insurance Moves for Today's Business Owners

  • jboynton96
  • Aug 11
  • 2 min read

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The Real Cost of Skipping Workers' Comp on a Jobsite


In construction, there’s a cost for everything—materials, equipment, labor. But the highest cost of all might be the one you don’t budget for: a workplace injury without proper workers' compensation coverage.


Some contractors try to cut corners by skipping workers’ comp or classifying employees as independent contractors. It might save money upfront—but the legal, financial, and reputational fallout can destroy everything you’ve built.


⚠️ What Happens When You Skip Workers’ Comp?


Let’s be clear: workers’ compensation insurance isn’t optional in most states. It's required by law for a reason—construction sites are some of the most accident-prone workplaces in the country. When you go without it, you open your business up to serious risks:


Legal Penalties

  • Many states impose heavy fines, criminal charges, or stop-work orders on businesses without coverage.

  • If you’re caught without workers' comp after an incident, personal liability for the owner is on the table.


Out-of-Pocket Costs


  • Without insurance, you're paying for all medical expenses, lost wages, and potential disability benefits yourself.

  • A single broken leg from a ladder fall can cost $30,000–$70,000+.


Lawsuits


  • Injured employees can file personal injury lawsuits, which often lead to higher settlements than standard workers’ comp claims.

  • You also risk being sued by subcontractors or property owners if you violate contractual insurance requirements.


Reputational Damage

  • Being labeled “uninsured” can destroy your credibility with GCs, developers, and commercial clients.

  • It may even lead to contract cancellations or exclusion from bidding opportunities.


🏗️ Real-World Scenario


Case in Point: A small framing contractor in Florida opted to misclassify workers as “1099” labor to avoid workers’ comp premiums. When one worker fell from scaffolding and suffered spinal injuries, the business faced:


  • $120,000 in medical bills

  • $60,000 in legal fees

  • A stop-work order from the state

  • Termination of a six-figure contract with a commercial developer


They ultimately went out of business—not because of the injury itself, but because they were unprepared for the consequences.


How Coastline Risk Protects Construction Businesses


At Coastline Risk, we work with contractors, developers, and tradespeople to ensure:


  • You meet state and contract requirements for workers’ comp

  • Your classifications are correct—no missteps that trigger audits

  • You’re matched with insurers who understand the real risks of the jobsite

  • You receive guidance on managing claims and improving site safety to help control premium increases over time


We also help you structure Owner/Operator policies and Wrap-Ups when needed, so you're never left guessing—or exposed.


Skipping workers' comp might feel like a short-term savings—but it’s a long-term gamble that rarely ends well. You wouldn’t build a foundation on shortcuts. Don’t build your business on one either.


🛠️ Smart contractors don’t wait for accidents. They prepare for them. Let Coastline Risk help.




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Contact Us Today: (617) 500-1824. / info@coastlinerisk.com


Protect your business, your team, and your projects with Coastline Risk. We're here to help you navigate the complexities of the insurance industry and secure the coverage you need to succeed. 


Learn more At Coastlinerisk.com




 
 
 

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