Tom Hallissey No Comments

How to Recognize and Prevent Construction Fraud

Construction fraud is an issue that plagues contractors across the country. In fact, three out of four construction companies surveyed by Kroll Global Fraud Report in 2015 reported that they had experienced fraud within the last year.

Whether you realize it or not, fraud has probably impacted your bottom line. From time theft to fake injuries, these workplace issues can be prevented if you learn how to recognize them. Read more

ContractorsInsurance No Comments

Job Site Theft is All Too Common

We all want to think that we can trust our staff and that they would never behave in a dishonest or malicious manner. Unfortunately, in this day and age, theft is all too common on the job site. In fact, professional industry estimates are that over $1 billion in losses every year are due to theft. The numbers have been growing ever since the mid-1990s and show no signs of stopping. Here are some tips to prevent job site theft and how you can mitigate the damage when these incidents occur.

Damages from Theft

The most obvious damage from job site theft come from the immediate loss of equipment and materials. You may suddenly not have the tools you need to perform a job. You might lose out on important construction materials from copper pipe to drywall.

This direct loss then leads to secondary losses: you have to pay extra money to replace the lost materials, and you may run overtime or over budget on the job as a result. This doesn’t even consider the loss in man hours as your crew waits for the needed tools and materials.

Why Construction is Targeted

Construction sites are often targeted for construction for several reasons. They often have poor security due to the very chaotic nature of the industry. This extends to off hours — nights and weekends — where things are often just parked and left unattended.

Equipment and vehicles have easy-access open cabs. A single key can operate most, if not all, of the equipment on a site. Record keeping is also often poor, meaning it’s hard to track when something goes missing.

Perpetrators of theft from job sites can include those who aren’t even employees, who simply break into the site looking for a quick smash-and-grab. They can also include workers who are desperate and in need of money, or very often can include disgruntled workers who feel they are “owed” something, or who have recently been let go.

job site theft

Reducing Theft

There are several steps you can take to reduce the risk of job site theft. When no one is working, keep the area well lit. Check up on things regularly and be sure your staff sees you doing it so they know you’re paying attention. Try to schedule supply delivery as you need it rather than stocking up right at the beginning of the job.

Maintain thorough records of all equipment, tools and materials and practice strong inventory management. Make sure that your perimeter is secured and locked down. Look into theft deterrents and recovery systems so that any equipment that is lifted can be tracked down.

Mitigating Damage

No matter how secure you are, there is always the risk that someone will find a loophole and engage in job site theft. In order to mitigate damage, you should always carry employee theft protection on your insurance policy. Standard insurance generally does not cover you against theft; specialized coverage is necessary.

Free Commercial Contractors Insurance Quote

ContractorsInsurance No Comments

Employee vs. Independent Contractor Checklist

Employee vs. Independent Contractor Checklist

With the new healthcare laws into effect combined with the cost of workers compensation, providing benefits to employees has become more expensive than ever before. Many employers are looking to downsize staff and bring in independent contractors to fill the gap. It is important, however, to be sure you are not misclassifying employees as contractors. Doing so could present a high degree of liability for you that could bring severe damage to your business. It’s vital to understand what constitutes a 1099 worker and construct an employee vs. independent contractor checklist.

A Growing Epidemic

Recent figures estimate that over a third of businesses have misclassified employees as 1099, or independent contract workers. In the construction industry, low wages and a lack of regulation have become epidemic, and misclassification has resulted in estimated figures nearing $100 million in unpaid workers comp insurance premiums. This doesn’t account for the loss of FMLA, unemployment, overtime and safe workplace protections.

Tax Issues

Employee misclassification also results in workers having to pay more taxes than they should, because they are paying the employer’s portion of social security tax, which for contractors is called the “self-employment tax.” While this may seem advantageous to the company looking to save money on their books, it is becoming a real problem in federal tax loss. It is also, so far as the IRS is concerned, fraud.

Determining the Difference

An independent contractor is someone who is self-employed. If the worker controls or directs the nature and means of the work being done (what to do and how to do it), they are an independent contractor. If the employer controls and dictates the services performed and how they are done, the worker is an employee. Finally, if an employer-employee relationship is in place, the worker cannot be an independent contractor. There are three basic factors that should form the basis of your employee vs. independent contractor checklist. These factors are:

  • Do you control how the worker performs his duties and exactly what those duties are? This forms the Behavioral aspect of the issue.
  • Are your employees’ business aspects controlled by you? That is, do you determine how the worker is paid, whether they get reimbursed for expenses and who pays for and supplies tools, equipment and the like? This is the Financial consideration.
  • Do you have written contracts for employee benefits? Is the relationship ongoing or for a set period of time? Does your worker perform a key role in your business? This is the Relationship aspect of employment.


Misclassification of an employee is considered fraud by the IRS. At very least you will be responsible for paying back employment taxes for the worker in question and may be held liable for deserved benefits that you have yet to provide. In addition, you run the risk of being reported. Any worker who thinks they have been misclassified may complete Form 8919 to report your share of these taxes.

For more information on liability insurance and the employee vs. independent contractor checklist, see our informational page, and get in touch with us for a review and quote today!

Free Workers Comp Insurance Quote

Contractors Insurance No Comments

Philadelphia Ironworkers Union Members Charged with Extortion

In what seems to be a news story straight out of Gotham City, ABC news correspondent Donna Puglisi has reported that a group of ironworkers from Philadelphia, PA have been indicted and arrested for a multitude of criminal activities. These include: criminal acts of extortion, destruction of property, and assault in order to force nonunion construction contractors to hire union ironworkers. The FBI believes that the pattern of violence and intimidation began in 2010, and if the men are convicted of all charges they will each serve between 35 to 130 years in prison.

Before they started intimidating contractors around Philadelphia, though they needed a name. And not just any ordinary name. They needed one that would boost their street-cred and make them sound like they belonged in a DC comic book. The organization created a variety of “goon” squads who had each had the opportunity to name their gang. One squad named themselves the THUGs (points for originality on that one), which stands for “The Helpful Union Guys.” These ‘helpful’ guys stand accused of assault, arson, and destruction of property.

The first report of malicious activity came between May and June of 2010. The event in question began in peaceful protest, but spiraled out of control when four of the defendants assaulted nonunion ironworkers with baseball bats.

Three years later, in December of 2012, the union conducted an arson of the Quaker Meeting House. In response to a contractor refusing to hire union ironworkers, three men went to the construction site and set a steel crane on fire. They also sabotaged other equipment which resulted in significant damages.

Their last episode occurred in July, 2013. The defendants threatened the contractor of an apartment complex under construction and forced him to relinquish his profits because he, like the others that the defendants extorted, did not hire Local 401 ironworker union members. He gave the job to a union-affiliated contractor.

Unions can be a great asset for those workers who treat the organization fairly and behave morally. And, with people still struggling to find work, it only stands to reason that some people would prefer not to be associated with a union in order to make themselves competitive.