Monitor Subcontractor Insurance In Quickbooks
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You are responsible for everything your construction subcontractors do. Make sure you manage this risk by monitoring your subcontractor's insurance coverages. To see more on this topic, go to http://www.builder-resources.com/QB-Monitor-Sub-Ins-Certs.html
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Monitor Subcontractor Insurance In Quickbooks
- 1. Track Subcontractor Insurance In Quickbooks Builder-Resources.com Builder-Academy.com A Construction Business Curriculum Designed to Help the ProBuilder Transition to a Lean and Efficient Technology-Based Environment Builder Resources
- 2. MONITOR INSURANCE CERTIFICATES IN QUICKBOOKS Making sure your assets are covered.
- 3. WHY? • Because you are responsible – – For injuries on the job – For property damage on the job • Because your insurance policy requires it– – Your Insurance policy requires that you only contract with subs who have a minimal amount of General Liability and Worker’s Comp insurance coverage. • Because your Terms and Conditions require it– – Required to carry General Liability and Worker’s Comp – Required to name your company as “Additional Insured”
- 4. The Quickbooks version I am using • Quickbooks Premier Plus Contractor Edition • All Contractor editions should be close to the same process • If you are not using Contractor edition, see what is offered in the VENDOR section of your version.
- 5. Add Vendor TYPE Select “Lists” Then Select “Customer and Vendor Profiles Lists” Then Select “Vendor Type List”
- 7. Add Vendor TYPE Add new Vendor Type, then select “OK” New Vendor Type added to Vendor Type List
- 8. Add Vendor TYPE Add another Vendor Type Added to list
- 10. Manage Vendor INFORMATION Select a subcontractor
- 12. Manage Vendor INFORMATION Select “Define Fields”
- 13. Manage Vendor INFORMATION Add new fields here
- 14. Manage Vendor INFORMATION Add fields and click in “Use for Vend”
- 15. Manage Vendor INFORMATION Add these seven fields Select “OK”
- 16. Manage Vendor INFORMATION The new fields are added to your screen Note that insurances are expired
- 17. Manage Vendor INFORMATION When you attempt a transaction with a subcontractor whose insurance has expired, you receive this warning…
- 18. Manage Vendor INFORMATION Enter information for all subcontractors
- 19. Build a MANAGEMENT REPORT Select “Vendors and Payables” The basis for the new report is going to be the “Vendor Contact List” Select “Vendor Contact List”
- 20. Build a MANAGEMENT REPORT Select “Customize Report”
- 21. Build a MANAGEMENT REPORT For DISPLAY, Select • Left Margin • Vendor • Main Phone • Fax • Email • Primary Contact • Work Comp Expires • Gen Liability Expires • T and C Renewal Date Select “Display”
- 22. Build a MANAGEMENT REPORT Select “Filters” Select “Vendor Type” Select “ Multiple Vendor Type”
- 23. Build a MANAGEMENT REPORT Select “Manual” and then check off all Subcontractor Vendor Types Select “OK”
- 24. Build a MANAGEMENT REPORT Need Emails for all subs Need Work Comp Expiration dates Need Gen Liability Expiration dates Need Terms and Conditions renewal dates
- 25. Build a MANAGEMENT REPORT When given the choice, SAVE the new report.
- 26. Build a MANAGEMENT REPORT Check to confirm that report has been saved.
- 27. Build a MANAGEMENT REPORT Risk management is part of your overall management responsibilities. You manage this type of risk just like you manage all the other risks of being in business. You either assume the risk (self-insure) or transfer the risk. For most of us, General Liability and Worker’s Compensation risks are too big to self-insure.
- 28. Build a MANAGEMENT REPORT As the general contractor on a project, it is up to you to avoid self-insuring and protect your buyer and yourself by making certain that all of the subcontractors are carrying appropriate insurances in the appropriate amounts.
- 29. Build a MANAGEMENT REPORT With General Liability insurance , and most especially with Worker’s Compensation insurance, it doesn’t matter until it matters… and then it matters a lot. QuickBooks makes it easy to monitor subcontractor insurance coverages. It just takes a little bit of discipline on your part.
Editor's Notes
- The Contractor edition of QuickBooks provides a module to track subcontractor insurance certificates. This session will demonstrate how to set up and use that function.
- Why is it important to track subcontractor insurance coverages? Because You are responsible. If your subcontractor is not carrying Worker’s Compensation insurance, and a worker is injured, that worker, or that worker’s attorney, is going to be looking to your insurance for coverage. If property is damaged on or around the site by the subcontractor, and the subcontractor has no insurance coverage, the injured party, or the injured party’s attorney, is going to be holding you, as the party responsible for bringing the subcontractor to the jobsite, accountable for the damage. Your insurance coverage requires that all subs who work on your project carry a minimal amount of General Liability and Worker’s Comp insurance. That means that if you are not requiring the insurance and monitoring the coverage, your insurance company has the option of denying coverage to you for damages caused by your subcontractors. Finally, if your are using the Builder-Resources Subcontractor Management System, the Terms and Conditions document requires in-place insurance coverage as a condition of the agreement. The T&C also requires that your company be named as and “Additional Insured” on the policy. Frankly, being named as an “Additional Insured” has become an issue lately, but at least make certain that your subcontractor has the required insurances in place.
- We are going to be talking about setting this process up in Quickbooks. The version I am using is Quickbooks Premier Plus Contractor Edition. All the Contractor versions should have approximately the same functionality for monitoring subcontractor insurances. If you are not using a Quickbooks Contractor version, take a look at the VENDOR section of your version, and determine if there is a way to set up an insurance monitoring program such as the one we will be discussing. Let’s get started…
- Let’s make sure we have the correct vendor types in the “Vendor Type List”. Select “Lists”. Select “Customer and Vendor Profile Lists”. Select “Vendor Type Lists”.
- We’re going to be adding Vendor Types, so select New.
- Add the new Vendor Type, then select OK. It appears in the vendor list immediately. One note here, …. You could simply create a vendor type called “Subcontractor”. Since we are interested in monitoring subcontractor insurance requirements, that would probably suffice. I chose to track subcontractors by phases, though, thinking that this might have additional utility down the road. For ease of entry, you could just add the type “subcontractors” now and, if you needed it later, come back in to this drop-down to add the individual contractor types (Framer, Electrician, Drywaller, etc.). Adding just “Subcontractors” will make it easier to create the report we are going to produce later in this exercise.
- Just in case you decide to add the individual vendor types, here is another example. Add Vendor Type Select OK Added to list.
- Once you have finished adding Vendor Types, click on the vendors icon to access the vendor database.
- Select any subcontractor
- And select “Additional info” to open the window we need.
- Note that the fields for Expiration are already available. Select “Define Fields” to add the custom fields we will need.
- The new fields will be added by you in the pop-up window displayed
- When the fields are added, be sure to click in the “Vend” column to activate that field. You can tell if the field is active by the check in the column next to the field label.
- The seven fields you will want to add include: Gen Liability Company Gen Liability Policy # Gen Liability Limits Worker’s Comp Company Worker’s Comp Policy # Worker’s Comp Limits T and C Renewal Date Once you have entered those seven labels, and confirmed that each is checked in the “Vend” column, select “OK”.
- The new fields show up now in the “Additional Info “ screen. Note that in the example shown, the insurance expiration dates are passed. We will see the effect of that in the next slide.
- When the insurance expiration dates are passed, every time you try to transact with the subcontractor, you will receive this warning message and a suggestion to contact the sub to update the insurance coverage information. You should not let the situation get to the point that you are seeing this warning, but if it does, immediately contact the subcontractor for the information required. Next in this session, we will be building a report you can use to stay on top of the insurance expirations proactively. You can click “OK” and continue with the transaction, but make a mental note to contact the subcontractor regarding the expired insurance.
- Enter the information for each subcontractor. The information regarding insurance coverages should be available on the insurance certificates currently on file. If you do not have an insurance certificate on file for a subcontractor, contact them immediately and request an update. The information for the Terms and Conditions renewal date will be available on the Terms and Conditions document, if you are using the Subcontractor Management System. Just look at the date of the last document and set the renewal date for 12 months in the future.
- Now that you have the information entered for your subcontractors, let’s create a report which will help us to monitor the insurance coverages. The basis for this new report is going to be the “Vendor Contact List”. To get there, select Reports > Vendors and Payables > Vendor contact list
- Once you have the Vendor Contact List showing, Select “Customize Report”
- Select “Display” Select the fields shown to have the report show the information in which you are interested. If a field is not on the list, but is checked in the default report, un-check it. You can pause the video while you go through this selection process.
- Next, select “Filters” to limit the vendor names displayed on the report to just subcontractors. Select “Vendor Type” as the filter for this report. Select “Multiple Vendor Types” to move to the next screen…
- Select “Manual” and then check off all Subcontractor vendor types. Again, you can pause the video as you go through this process. Once you have selected all the Subcontractor vendor types, including the catch-all type “Subcontractor”, click on “OK”.
- Here is the report that is generated from the information selected. The nice thing about this report is that it shows which information is missing. You can see which Worker’s Comp information is missing; Which General Liability expiration dates are needed; Which Terms and Conditions are needing renewal; And which Company e-mail addresses are missing. You can print this report once a month and flag any upcoming renewal dates. Then just email the subcontractor to let her know that you need an updated insurance certificate. This alerts the sub that you are tracking the information, and expect their cooperation. You can also print this report when the insurance company does their annual audit of your insurance coverages. It will show the insurance company that your are serious about meeting your insurance requirements and maintaining your coverage.
- Name the new report as shown. Save in the Memorized Report Group under Vendors.
- Check that the report is where it should be by going to Reports > Memorized Reports > Vendors > and look for “Vendor List – Insurance Monitor”
- Risk management is part of your overall management responsibilities. You manage this type of risk just like you manage all the other risks of being in business. You either assume the risk (self-insure) or transfer the risk. For most of us, General Liability and Worker’s Compensation risks are too big to self-insure.
- As the general contractor on a project, it is up to you to avoid self-insuring these risks and protect your buyer and yourself by making certain that all of the subcontractors are carrying the appropriate insurances in the appropriate amounts.
- With General Liability insurance , and most especially with Worker’s Compensation insurance, it doesn’t matter until it matters… and then it matters a lot. QuickBooks makes it easy to monitor subcontractor insurance coverages. It just takes a little bit of discipline on your part.