I am the owner of a Union Architectural Millwork Installation Company. We have been working on a project in Pebble Beach, CA for 2 years. We are 90% complete. My client has not been paid by the owner for 5 months, but they have been paying us. Until now. November 5th I was to receive a progress payment. Our workers comp insurance notified us we would be cancelled if they did not receive payment on Nov. 5th. I told the insurance company we would pay. I could not, because I did not get paid. Morning of Monday Nov. 7th, client tells me they will send a check on Tuesday, Nov. 9th. Afternoon on Tuesday, client tells me they received Notice of Cancellation from my workers comp carrier and now they cannot pay us until policy is reinstated. I do not have the money to pay without our payment from client. Is this fair? Legal? I had coverage when we did the work. Pay me.
From contributor B:
Sometimes life sucks. Any chance you can get the workman's comp people to go ahead and do a certificate as soon as you give them a check and talk them into holding the check for 36 hours? As soon as they get a check, they can fax a binder, which should get your check released. Offer to pay a wire fee and have them wire the money directly into your bank account as soon as they receive notice that your insurance is in force. Just an idea that might work if you approach everybody really nice and try to explain the situation. In my mind, they should have to pay if you had insurance in force when the work was done, but I don't know how it works in your state.
The most he should be able to withhold is the audit premium for the hours your guys worked on his project and you haven't paid (with you not paying, he is now responsible for your workers comp payment). Are you doing audited premiums and do you track your labor by job? If so, give a copy of the monthly audit you filed. It sounds like you don't have time for lawyers. See if you can work something out quickly. Did you file a preliminary notice and have you been updating or keeping the amount current?