As the United States Army Corp of Engineers (USACE) DBA program winds down, contractors need to be aware that the shift to the open market may have an impact on their DBA Insurance rates.
For example, the rate charged for service work in the old USACE DBA program was $3.50 per $100 of payroll, and this is a fairly typical rate charged in the open market by most DBA Insurance carriers. The rate for construction work in the USACE program, however, was atypical at $4.25 per $100 of payroll. The average open market rate for light construction work is $8.00 per $100. At nearly double the rate, businesses rated for construction work should prepare to see a big increase in their DBA premium. The LATITUDE DBA Insurance Program, a DBA Insurance broker for Allied World Assurance, offers a light construction rate well below the average open market rate, at $5.50 per $100, for eligible contractors. A rate savings of this degree could have a substantial impact on your bottom line.
Businesses also need to be aware of the overall minimum premium imposed by DBA carriers. The standard minimum premium is $9,000. This means that even if calculated premium is less than $9,000, the $9,000 minimum will be charged. If the total premium is above $9,000, the Underwriter will calculate a minimum premium and can request that this amount be the minimum earned (the amount of premium they are guaranteed to receive even if the policy is cancelled, or it is determined at the end of the policy term that the actual payroll was less than estimated when the policy was purchased).
These rate changes are an important considerations for contractors insured in the USACE program. The LATITUDE DBA Insurance team of experts has more than 25 years of experience and extensive knowledge of the DBA marketplace, and they can assist you in exploring your coverage options. If your insurance is currently with the USACE DBA program and expires October 1, 2013 or after, contact the LATITUDE DBA Insurance program today to get started.