Workers’ Compensation (WC) insurance is a must-have for nearly every business with employees. The way premiums are calculated can create cash flow and administrative headaches for business owners.

If you’ve ever faced a surprise bill after your annual audit, or if your payroll fluctuates throughout the year, switching to a Pay-As-You-Go (PAYG) workers’ comp plan could save you time, money, and stress.

The Problem with Traditional Workers’ Compensation Billing

Traditional WC premiums are calculated based on estimated annual payroll at the beginning of your policy term. Here’s why that creates issues:

• Overestimated payroll? You’re overpaying all year and tying up working capital.
• Underestimated payroll? You’ll owe a large lump sum at the end of the year.
• In addition, annual audits become stressful and time-consuming, especially if records don’t match.
• Cash flow suffers, especially for seasonal or project-based businesses.

Key Benefits of PAYG WC for Business Owners

1. Improved Cash Flow

• You only pay for what you owe, when you owe it—keeping more cash in your pocket.

2. Greater Accuracy

• Reduces the risk of over/under payment and surprises at audit time.

3. Simplified Audits

• Because you report payroll accurately throughout the year, your records are always up-to-date.

4. No Large Down Payments

• In addition, many PAYG programs eliminate the need for large deposits upfront, unlike traditional WC.

5. Ideal for Growing or Seasonal Businesses

• If your payroll changes frequently, PAYG adjusts automatically to your business’s needs.

6. Integrated with Payroll Providers

• Most PAYG WC programs integrate directly with popular payroll software like QuickBooks, Gusto, ADP, Paychex, and others.

Is PAYG Right for You?

Consider PAYG Workers’ Comp if your business:

• Has fluctuating payroll or seasonal employees
• Wants to improve cash flow and budget predictably
• Has struggled with audit surprises or overpayments
• Wants a “set-it-and-forget-it” solution for premium payments

If you’re tired of year-end billing surprises and want a smarter, streamlined way to handle workers’ comp, talk to our agent about switching to Pay-As-You-Go Workers’ Compensation.

In today’s increasingly complex construction environment, it’s critical for general contractors (GCs), tradesmen, construction managers, and design-build firms to understand the distinct but complementary roles that General Liability (GL) and Professional Liability (E&O) insurance play in protecting your business.

What is General Liability Insurance?

Commercial General Liability (CGL) insurance is a standardized form of protection that guards against third-party bodily injury, property damage, and personal/advertising injury arising from your business operations.

It typically does NOT cover professional services, which is where many contractors encounter unexpected coverage gaps.

Common GL Policy Exclusions:

CGL policies issued to construction professionals often include endorsements that limit or exclude professional exposures:

• CG 22 43 – Exclusion – Engineer, Architect or Surveyor Professional Liability
  This removes coverage for BI/PD arising from professional services such as preparing, approving, or failing to prepare or approve designs, maps, reports, surveys, and drawings.
• CG 22 79 – Exclusion – Contractors Professional Liability Coverage
  Excludes coverage like CG 22 43 does; but includes an exception for services related to construction means, methods, techniques, and procedures such as setting up cranes, scaffolding or other temporary braces.
• CG 22 80 – Exclusion – Contractors Professional Liability – Limited Form
  Similar to CG 22 79 but narrower in scope; particularly relevant for services rendered by a design subcontractor.

These exclusions make clear that GL is not designed to protect against design errors, faulty plans, inaccurate surveying, or professional judgments—which are often central in modern construction projects.

What is Contractors Professional Liability (E&O) Insurance?

Also referred to as Errors & Omissions (E&O) coverage, this form of insurance is non-standard, meaning the scope, definitions, and limits vary by insurer. It protects against claims alleging negligence in the performance of professional services—often arising from errors in design, consultation, supervision, or project management.

Common E&O Exposures for Construction Professionals:

• Design errors or omissions in architectural or engineering plans
• Incorrect site surveys or land assessments
• Inadequate project specifications or blueprints
• Failure to meet building codes or zoning requirements
• Improper supervision or contract administration
• Delays caused by professional misjudgment

These risks are especially prevalent in design-build or construction management delivery models, where responsibilities blur between professional and operational roles.

Why You Need Both Coverages Working Together

GL and E&O are not substitutes for one another. Instead, they complement each other, providing broader protection for the full scope of your construction operations.

Key Benefits of Adding E&O Coverage:

• Fills the gap left by GL exclusions for professional acts
• Protects against third-party claims of negligent advice, planning, or oversight
• Covers subcontractor-related professional claims post-construction, especially when the sub’s insurance is inadequate (Protective Indemnity)
• Satisfies contract requirements in design-heavy or government-funded projects
• Enhances client trust and credibility, showing you understand and manage your risk responsibly

In summary, General Liability covers the “hands-on” risks: physical injury or property damage from your operations. But when your role extends into planning, designing, advising, or managing the construction process, you need Professional Liability (E&O) to fully protect your business.

Building a risk management plan that includes both GL and E&O protection is vital to the financial health of your business. Don’t wait until a claim highlights the gap. Work with an experienced insurance advisor who understands the complexities of the construction industry and can tailor coverage to your operations.