Latest / Your Money, Your Rules | Financial Mastery, Wealth Mindset, Leadership Principles, Intuitive Decision-Making, Human Design / 177 | General Liability Insurance & Subcontractors: What Most Business Owners Are Never Told

Transcript

177 | General Liability Insurance & Subcontractors: What Most Business Owners Are Never Told · Your Money, Your Rules | Financial Mastery, Wealth Mindset, Leadership Principles, Intuitive Decision-Making, Human Design

• 0:00
  Erin Gray: Today we are going 3D.
• 0:02
  Erin Gray: I'm getting specific, super specific about subcontractors and your insurance.
• 0:07
  Erin Gray: Specifically, general liability insurance, what you need to know and communicate with your insurance professional so that you can bypass a recent conversation that I had with a client.
• 0:16
  Erin Gray: She wasn't the first client that I have had this conversation with.
• 0:19
  Erin Gray: And because of this, that means it's probably occurring and happening more frequently than I'm aware of, or it's probably happening in the collective because I know I've had several conversations with clients regarding this.
• 0:30
  Erin Gray: I've had several conversations with just business owners that I've talked to in the wild about this.
• 0:35
  Erin Gray: So it's happening out there in our relationships with our insurance professionals.
• 0:40
  Erin Gray: And it's something that I want to educate you on so that you are aware.
• 0:46
  Erin Gray: So let's dive in.
• 0:47
  Erin Gray: Okay, promise you can fade out the music here, and I'm gonna invite them to the workshop and then I'm gonna start teaching.
• 0:54
  Erin Gray: I want to invite you to come hang out with me this Thursday, January 15th at 10 a.m.
• 0:59
  Erin Gray: Mountain Standard Time.
• 1:00
  Erin Gray: I'm gonna be hosting a workshop all about feminine leadership, educating you on the power of play, having fun in your life, more ease.
• 1:09
  Erin Gray: You can click the link in the show notes to join us, and I would love to see you there.
• 1:12
  Erin Gray: Okay, so 2025 was like one of those years that I decided, you know what, I'm just gonna be more bold.
• 1:17
  Erin Gray: Like that is one of the things I actually want to embody.
• 1:19
  Erin Gray: And now 2026, I'm like, you know what, just like what do you call it?
• 1:22
  Erin Gray: Like take off the gloves or like let's you know, let the roof come completely off.
• 1:26
  Erin Gray: Like, I feel so protective of my clients, of humanity.
• 1:31
  Erin Gray: And I will be honest, the human in me gets a little irritated and agitated when a client tells me something that one of their advisors has told them and or hasn't told them, I should say.
• 1:43
  Erin Gray: I feel this like in my body.
• 1:46
  Erin Gray: And you know, I I've really sat with this and thought, like, Aaron, is this something that you want to be?
• 1:51
  Erin Gray: Yes, it is something I want to be upset about because this is something that I want to have changed.
• 1:54
  Erin Gray: Yes, we don't need to make change from anger and frustration.
• 1:58
  Erin Gray: And also it's like, you know, the conversation that, and I'm gonna share with you here in a second, but the conversation that I have with my client was just like, I didn't know.
• 2:05
  Erin Gray: And it's like, and I told her, I'm like, yeah, and you're not supposed to know.
• 2:08
  Erin Gray: Like, how are you supposed to know?
• 2:10
  Erin Gray: Like, that is the job of your insurance agent.
• 2:12
  Erin Gray: So I'm gonna dive into what actually occurred, and then I want to share with you the questions that you need to be asking or just the education piece that you need to be aware of so that you can address this with your insurance agent.
• 2:27
  Erin Gray: So we were having this conversation about, and I'm talking specifically about general liability insurance, and I'm talking about whether you have subcontractors.
• 2:36
  Erin Gray: So, as a business owner, when you carry general liability insurance and you have a subcontractor that comes and does work for you, theoretically, you and when I say should, I don't like using that word, but like best practice, let's use that word.
• 2:55
  Erin Gray: Best practice is you would tell your subcontractor, hey, subcontractor ABC, you're doing work for me.
• 3:02
  Erin Gray: You need to carry your own insurance, and you need to tell your insurance agent that you are going to name my company, XYZ, as an additional insured.
• 3:11
  Erin Gray: And then that ABC company is going to give you a certificate of insurance that names you as the additional insured.
• 3:18
  Erin Gray: And when you pay your general liability premiums, you are going to pay pennies on the dollar if they do that.
• 3:26
  Erin Gray: If they do not do that, then what is happening is you are going to pay insurance on your subcontractor like they were an employee.
• 3:36
  Erin Gray: And when I talked to her about this, you know, she shared with me like her frustration that like she wasn't told this.
• 3:43
  Erin Gray: And I agreed, like this is sadly, like this is part of business, you know.
• 3:50
  Erin Gray: We we don't learn this in school.
• 3:53
  Erin Gray: We don't typically learn this like as we're like talking to our, you know, friends about our businesses.
• 4:00
  Erin Gray: Like, this isn't something that I've noticed that business owners talk about.
• 4:04
  Erin Gray: And so if you don't learn it before, then typically what happens if you don't have a good insurance professional teaching you this information and is aware of this stuff, you learn it through experience.
• 4:16
  Erin Gray: So either you already have the knowledge already, you have a stellar insurance agent, or you don't know this and you don't have a stellar insurance agent and you learn it through doing.
• 4:28
  Erin Gray: So this isn't, I want you to understand that if you are in this position, it is not because you are being ignorant, it is not because you are stupid, it is not because you should have known.
• 4:38
  Erin Gray: Like, I want you to remove the blame and the shame with this because I think a lot of women, and I've even talked to men that this has happened too, that they blame themselves.
• 4:49
  Erin Gray: Like they should have known better.
• 4:50
  Erin Gray: And it's like, how?
• 4:51
  Erin Gray: How were you supposed to have known?
• 4:53
  Erin Gray: Like, this is where we think like we should, you know, learn, know how to treat ourselves so kindly and lovingly.
• 4:59
  Erin Gray: It's like, how?
• 5:00
  Erin Gray: Because we didn't have parents to do that for us.
• 5:02
  Erin Gray: So who was supposed to teach us?
• 5:04
  Erin Gray: So I want you to really first and foremost, like, drive home.
• 5:08
  Erin Gray: This isn't your fault, right?
• 5:11
  Erin Gray: And it is our responsibility.
• 5:12
  Erin Gray: So now that we know, right, think about like that we assume that professionals are going to think of all the things and anticipate everything.
• 5:22
  Erin Gray: And I always advise my clients that you have to advocate for yourself, right?
• 5:28
  Erin Gray: Educate yourself, empower yourself.
• 5:30
  Erin Gray: And even still, let's just be honest, like that's part of just life.
• 5:33
  Erin Gray: Like, even if you do educate, even if you do learn all the things, sometimes things just get missed.
• 5:38
  Erin Gray: And it's how what I think is the biggest thing is how you respond to what is occurring and how you bounce back, is what actually matters.
• 5:49
  Erin Gray: So I want to kind of dive a little bit deeper so that you understand this.
• 5:53
  Erin Gray: And I want to be really clear.
• 5:55
  Erin Gray: I'm not an insurance professional, I'm not a finance professional, I'm not an attorney, I'm not all the things, right?
• 6:01
  Erin Gray: I just have 20 years under my belt of being in business and advising clients on stuff like this.
• 6:06
  Erin Gray: I've seen a lot, to put it mildly.
• 6:09
  Erin Gray: So I want to reiterate if you have a subcontractor that works for you, you pay a specific rate.
• 6:16
  Erin Gray: Let's just use this.
• 6:18
  Erin Gray: If they do not have a certificate of insured and they are not naming you as an additional insured, you are paying an employee rate.
• 6:25
  Erin Gray: That is typically much higher than it would, is if you required them to carry insurance and to name you as additional insured.
• 6:36
  Erin Gray: Now, if they don't have insurance, this is a business decision.
• 6:39
  Erin Gray: This is a conversation that I had with my client as well.
• 6:41
  Erin Gray: Like you can do one of two things.
• 6:43
  Erin Gray: You can either carry them on as your insurance and you can take on that cost, or you can carry them on your insurance.
• 6:50
  Erin Gray: And this is all you obviously need to have a subcontract agreement in place.
• 6:54
  Erin Gray: Like, let me just say that.
• 6:55
  Erin Gray: Again, I'm no attorney.
• 6:56
  Erin Gray: So all the things, but like, here's what I have done.
• 6:59
  Erin Gray: You always have a subcontract agreement in place.
• 7:02
  Erin Gray: You're very specific about what you require for your insurance requirements.
• 7:06
  Erin Gray: And these are conversations like this episode is specifically for you to be like, oh, didn't know that.
• 7:12
  Erin Gray: Let me go have this conversation with my insurance agent.
• 7:14
  Erin Gray: Oh, wasn't aware of this.
• 7:16
  Erin Gray: Let me also bring that up with my insurance agent.
• 7:18
  Erin Gray: So you have a subcontract agreement.
• 7:20
  Erin Gray: You're very explicit in your terms of payment and all the things that the attorney drafts for you and your insurance limits.
• 7:27
  Erin Gray: And if they do not have insurance and you decide you want to cover them, obviously you need to have that conversation with your insurance agent.
• 7:35
  Erin Gray: And you can decide from a business decision do you want to cover that in your cost, or you can deduct that from the contract price.
• 7:42
  Erin Gray: That's obviously all those things need to be determined and deciphered between you and your subcontractor.
• 7:47
  Erin Gray: Obviously, maybe you an attorney and you and your insurance agent.
• 7:51
  Erin Gray: So the important thing that I really want you to take away from this is not all subcontractor insurance rates are the same, right?
• 8:00
  Erin Gray: So ask these questions to your insurance agent.
• 8:03
  Erin Gray: And then also something that I wanted to briefly state here is most people receive a general liability audit.
• 8:10
  Erin Gray: Most people are not aware of this.
• 8:13
  Erin Gray: Most business owners are not told that this is what's actually going to happen.
• 8:17
  Erin Gray: So without diving too deep into general liability insurance, if you do have it, typically it is, and I'm generalizing here, it's based off of your payroll and or your revenue.
• 8:30
  Erin Gray: So at the end of a not calendar year, but insurance year, right?
• 8:35
  Erin Gray: So like if you started in April, like in for us, we always renewed every April.
• 8:40
  Erin Gray: So every April or a little bit sooner than that, I would receive an audit.
• 8:44
  Erin Gray: Or actually, I should say a little bit after it was always in May that we would receive an audit.
• 8:48
  Erin Gray: So we would get all the, you know, that would be that one full calendar year.
• 8:51
  Erin Gray: And then I would have the results or the total payrolls and the revenues, and then we would have an audit.
• 8:58
  Erin Gray: I advise clients, if they are getting audited, to be pulling payroll reports quarterly and your PL, which, like for sure, you need to be pulling your PL on a monthly basis, but pulling your PL on a quarterly basis to see where are you in line with your audit.
• 9:16
  Erin Gray: Because if you have, let's just say you have told them your revenue is going to be 2 million and you're already at 2 million and you're halfway through the year, you know, of your audit year, then you are going to owe money, which is fine.
• 9:29
  Erin Gray: It's just knowing that you're going to owe money and you need to be putting money aside, or you need to be emotionally prepared for that versus you get an audit and you're like, okay, now I owe$100,000.
• 9:38
  Erin Gray: And I didn't know that.
• 9:40
  Erin Gray: So really being clear, like having these conversations with your insurance agent.
• 9:46
  Erin Gray: And also like, this is another thing.
• 9:48
  Erin Gray: If you have a bookkeeper, these are bookkeeper things that they need to be also working with you on.
• 9:54
  Erin Gray: And if they don't know this, maybe it's time for another bookkeeper.
• 9:58
  Erin Gray: Again, we don't have to tolerate mediocre support.
• 10:02
  Erin Gray: Okay, so from a nervous system emotional regulation authority figure, like, okay, I'm gonna put now on my coaching hat.
• 10:12
  Erin Gray: And from that place, I want you to know you might not even know the questions to ask, right?
• 10:17
  Erin Gray: If you don't have an Aaron in your corner supporting you saying, Hey, have you thought about this?
• 10:22
  Erin Gray: Oh, have you asked your insurance agent about this?
• 10:24
  Erin Gray: Hey, why isn't your bookkeeper doing this and asking you questions like this?
• 10:28
  Erin Gray: If you don't have an Aaron in your corner, you aren't going to know, probably.
• 10:32
  Erin Gray: I would, I don't want to assume, but you may not know the questions to ask.
• 10:35
  Erin Gray: So give yourself some grace.
• 10:37
  Erin Gray: From a nervous system standpoint, if you don't feel safe to question who you're working with, then we need to do a couple of things, right?
• 10:45
  Erin Gray: We need to support your nervous system, we need to regulate your nervous system and get you to a place where you feel safe to question and to speak up.
• 10:53
  Erin Gray: And number two, maybe we need to find you someone else who is like supporting you, like what might be a better fit for you in a way that you need to be supported and to be treated.
• 11:05
  Erin Gray: You know, one of the things that I would would and do always tell CPAs or attorneys or whomever I'm working with, when I ask you questions, first of all, I always say, like, I'm gonna ask you all the questions.
• 11:16
  Erin Gray: And I'm also gonna ask you, and another question to ask them is what have I not asked that I need to know?
• 11:22
  Erin Gray: Like I always ask that question.
• 11:24
  Erin Gray: And I also ask, if I was your daughter or I was your sister, or I was your wife, or however to make it personal for them, what would you be telling me that you're not telling me right now?
• 11:34
  Erin Gray: Like actually make them think about things that may they may have left out.
• 11:40
  Erin Gray: And so when I tell or work with CPAs or attorneys or bookkeepers or whatever it is, I always say, when I ask you questions, I'm not necessarily challenging you, although sometimes I can, but really what I'm asking is I want to learn and I want to understand where you are coming from.
• 12:00
  Erin Gray: Why are you suggesting that we go this way?
• 12:03
  Erin Gray: Like I want to get inside their brains and understand this stuff at a deep level.
• 12:08
  Erin Gray: And you might be like, you know what, Aaron, this doesn't light me up the way it lights you up, or it doesn't, you know, really like this isn't in my wheelhouse.
• 12:15
  Erin Gray: And I get it.
• 12:16
  Erin Gray: And also, I think this is the part where we have to take ownership and responsibility as a business owner.
• 12:25
  Erin Gray: Because what I have seen is we abdicate this responsibility.
• 12:29
  Erin Gray: We just assume our insurance agent is doing what they're supposed to be doing, we assume our bookkeeper is supposed to be doing, and then I sit down with you and I start asking you questions, and you're like, I had no idea.
• 12:39
  Erin Gray: And it's like, yes, we can't just like until we have trained people, until we have kind of like what I always say, like, you gotta go through a couple of things with me before you get like the errand checkoff, before I like send you on your way and I'm like, okay, you're good to go, right?
• 12:54
  Erin Gray: Like, I don't just hire someone or start working with somebody and be like, oh, they're good.
• 12:58
  Erin Gray: They say they know what they're doing, and then off to the races they go.
• 13:01
  Erin Gray: No, it's like one of those things of like trust and verify, right?
• 13:04
  Erin Gray: So as a CEO, you are the vessel, you are at the helm, you are responsible.
• 13:10
  Erin Gray: And that is a beautiful thing.
• 13:12
  Erin Gray: Yes, you can put people in your corner to help you, but that doesn't abdicate your responsibility for not taking ownership of like, no, the buck stops with me.
• 13:22
  Erin Gray: Like, I gotta understand this because I'm the CEO.
• 13:25
  Erin Gray: Like, CEO of trying to think of like a publicly traded company, like they have to know their stuff.
• 13:31
  Erin Gray: And like that's that is the identity that we need to be assuming no matter what our revenue is.
• 13:36
  Erin Gray: Like, I know my numbers, I know who like is working with me, I know the insurance ins and out, I know the attorney, like you've got to really, really take ownership and the identity of like, no, I know my stuff.
• 13:50
  Erin Gray: And that I think when you look at it from that place, like I think you will feel so much more empowered because when you know, when you are intimate, like I said to a client last week, I'm like, it's time to get intimate with your business and your numbers.
• 14:05
  Erin Gray: And we laugh and it can be totally fun.
• 14:07
  Erin Gray: Like working with me is so fun.
• 14:09
  Erin Gray: It's you know, like we play a lot and we also get down to business and we get some stuff done.
• 14:14
  Erin Gray: But I make it fun and lighthearted.
• 14:16
  Erin Gray: It doesn't have to be this serious matter, which I think a lot of advisors do.
• 14:20
  Erin Gray: But, you know, we were laughing because it was just like, let's get down to business, like let's get, let's get intimate.
• 14:25
  Erin Gray: Like, okay, it's time to really get to know one another.
• 14:30
  Erin Gray: And meaning her with her books and her books with her, right?
• 14:34
  Erin Gray: And so, you know, just just think of it that way of like this is this is a relationship that you have, a relationship with your business, a relationship with your money in your business, a relationship with you and all of the people that support you, and you deserve to know all of the things, and you deserve to understand all of the things.
• 14:54
  Erin Gray: So if you are working with people that don't support you and aren't helping you, and you feel like in your highest, which here you go back to intuition, follow your intuition.
• 15:04
  Erin Gray: Get you someone else that's going to be more supportive for you.
• 15:07
  Erin Gray: And the final thing that I want to say here is that we learn by doing.
• 15:11
  Erin Gray: I think a lot of us, you know, I went to college and I was a good little A student, right?
• 15:17
  Erin Gray: And in school, they don't teach you how to be an entrepreneur, they teach you how to be the opposite of one.
• 15:21
  Erin Gray: And so the best way to learn is you just go do some shit and you get some data and you learn from it and you do it again.
• 15:28
  Erin Gray: And the faster that you can do that, the more data and the the faster that you move along your path.
• 15:34
  Erin Gray: And I'm not advocating for fast, but you get my point.
• 15:37
  Erin Gray: And so a lot of times in entrepreneurship, we learn by doing.
• 15:40
  Erin Gray: There, I don't like to look at it as failure.
• 15:43
  Erin Gray: I like to look at it as learning.
• 15:45
  Erin Gray: And sometimes we learn with time.
• 15:47
  Erin Gray: Sometimes we learn with money.
• 15:49
  Erin Gray: Sometimes we learn after something happened, we learn time and money, right?
• 15:53
  Erin Gray: We can learn, we can learn it through all of it.
• 15:56
  Erin Gray: And what is most important is that you are not shaming yourself and beating yourself up along the way because that is not a helpful thing, right?
• 16:04
  Erin Gray: It doesn't feel good in the body, it doesn't really set you up to like recover, you know, it's just, it's just not a helpful emotion.
• 16:13
  Erin Gray: You deserve to be and to feel love and loved, right, through your journey.
• 16:19
  Erin Gray: So be your biggest advocate.
• 16:21
  Erin Gray: Have some kindness and and some compassion for yourself and be like, you know what?
• 16:25
  Erin Gray: I didn't know, you know, I didn't know the questions to ask, but now I do.
• 16:29
  Erin Gray: And now I'm gonna do differently, right?
• 16:31
  Erin Gray: Like that's the only really thing I think that you can glean or take from when things don't work out the way because you weren't aware, it's not a problem, right?
• 16:41
  Erin Gray: It's just like, okay, now what do I know?
• 16:43
  Erin Gray: What do I want to do differently?
• 16:44
  Erin Gray: And if you're listening to this and you're thinking, hmm, you know, I'm not sure if my insurance agent and I have actually had this combo or we've I've been educated, like, set some time aside to be like, educate me on my policy.
• 16:57
  Erin Gray: Like, go through line by line and be like, what does my policy represent?
• 17:01
  Erin Gray: Like that is always something that I would do every single year, is I would look at the policy, I would ask my specific, I would, I mean, I had so much written information on our policy because I would use that to also train people that I was when I was replacing myself, right?
• 17:17
  Erin Gray: Like ultimately we want to be higher up in that 30,000 foot view so that we have people doing all of this stuff for us.
• 17:23
  Erin Gray: But in order to train somebody to teach them, you know, all of this information, you've got to understand it first.
• 17:29
  Erin Gray: And so I would just write everything on the policy, like so I could understand it.
• 17:33
  Erin Gray: And I would go back and every you know, audit year or renewal cycle, it would give me an opportunity to go back through and understand and become more intimate with the insurance policy.
• 17:43
  Erin Gray: So if you're thinking, hey, I haven't had this conversation with my insurance agent, maybe it's time for you to go have that conversation, right?
• 17:50
  Erin Gray: And if you want someone in your corner who's giving you this 30,000-foot view in a loving, in a supportive, in a fun and playful way, reach out to me.
• 17:58
  Erin Gray: See if we're a good fit for working together.
• 18:00
  Erin Gray: I truly love supporting women business owners along their journey, not just emotionally, but also the intellectually, like I call it the 3D, the knowledge basis as well.
• 18:10
  Erin Gray: Okay, I love you.
• 18:11
  Erin Gray: I am so proud of you.
• 18:12
  Erin Gray: Stay off of the shame and the blame and the guilt bus.
• 18:16
  Erin Gray: Go on over to the empowered and the love and the fun and the joy and the I got this bus.
• 18:23
  Erin Gray: Okay, I'll see you in the next episode.