What happens if, in an attempt to lower their insurance credit, a contractor underestimate their payroll? – Matthew, Chicago, IL
Matthew, excellent question! From time to time, we do see contractors underestimating their payroll estimates in attempt to lower their initial insurance credit deduct. With our historical data from previous projects, we are able to predict an accurate payroll estimate based on their type of work, workers’ compensation classification, and the state that they will be working. Once we can predict an accurate payroll estimate, we will revise their insurance calculation and request for signature to ensure that a fair and accurate credit is agreed upon. If it is a deduct program (and not in New York), it is important for the contractor to provide an accurate payroll estimate, so they are not responsible for a large additional wrap-up deduct at the end of their work.
Learn more about wrap-ups on our resource page: Wrap-Up FAQ page