Building permit in my name

[zk]

We’re building a granny flat in our back yard. We’re using a friend of my wife’s, who has done work for us before (good, well-priced work), and who has been in the contractor business for 8 or 10 years.

She (the contractor) has gotten an architect to draw the plans already, and we’re getting ready to apply for city permits.

Yesterday I get an email from the architect saying I need to fill out this form:

https://www.sandiego.gov/sites/default/files/legacy/development-services/pdf/industry/forms/ds3042.pdf

Basically this form says that the permit will be in my name and that therefore I’m at risk for liability due to any workers’ injuries and that I’m responsible for, among other things, acting as the employer for anybody who works on it, and providing them with worker’s comp disability insurance, withholding payroll taxes, etc. And I’m liable for any future personal or financial injury resulting from any latent construction defects.

It also says something about how using a licensed contractor can protect me from getting ripped off. I guess she’s not a licensed contractor, but I’m not the least concerned with getting ripped off here. But the other stuff seems a bit scary to me.

Should I be scared? Is there some kind of worker-injury insurance I can/should buy if I don’t hire a licensed contractor? Any other concerns I should have? Any other thoughts or ideas?

Any and all input would be greatly appreciated.

[gzz]

Ask your homeowners insurance agent if this is already covered or can be added.

Workplace accident insurance is obscenely expensive compared to the risk, so you could also just self insure (ie not worry about it).

[zk]

[quote=gzz]Ask your homeowners insurance agent if this is already covered or can be added.

Workplace accident insurance is obscenely expensive compared to the risk, so you could also just self insure (ie not worry about it).[/quote]

Thanks, gzz. I appreciate the ideas.

“self insure (ie not worry about it)”

Never heard it put that way. I like it.

[Coronita]

Might be covered by an umbrella insurance policy. Don’t know, check with your underwriter of your umbrella if you have one..

umbrella insurance is pretty affordable: $5-10million policies go for about $1000..

you do need to maintain a minimum liability coverage across all your assets though.
It’s probably around $250k+ for each home and $250k+ for auto and watercrafts (at least that is the case for me)

There are some exclusions or limits but none of those I think are relevant to this situation. The primary exclusions/limits these days is apparently liability insurance for slander and libel on social media…I’m not kidding…

I think my umbrella is through a company called RLI. It doesn’t have to be the same as your homeowners and auto, you just need to maintain the minimum liability on the rest of your insurance. I’m sure of that…because I have a hodgepodge of insurance…my primary is through one agency, my rentals through another, most of my cars are through allstate, but two are through Hagerty because they are now old enough to be classified as “classic cars” lol.. it’s a royal pain, but the reason is I have the best coverage this way for the lowest price
.. no issues with the umbrella coexisting with multiple insurance.

[zk]

[quote=Coronita]Might be covered by an umbrella insurance policy. Don’t know, check with your underwriter of your umbrella if you have one..

umbrella insurance is pretty affordable: $5-10million policies go for about $1000..

you do need to maintain a minimum liability coverage across all your assets though.
It’s probably around $250k+ for each home and $250k+ for auto and watercrafts (at least that is the case for me)

There are some exclusions or limits but none of those I think are relevant to this situation. The primary exclusions/limits these days is apparently liability insurance for slander and libel on social media…I’m not kidding…

I think my umbrella is through a company called RLI. It doesn’t have to be the same as your homeowners and auto, you just need to maintain the minimum liability on the rest of your insurance. I’m sure of that…because I have a hodgepodge of insurance…my primary is through one agency, my rentals through another, most of my cars are through allstate, but two are through Hagerty because they are now old enough to be classified as “classic cars” lol.. it’s a royal pain, but the reason is I have the best coverage this way for the lowest price
.. no issues with the umbrella coexisting with multiple insurance.[/quote]

Thanks for the tips. I really appreciate it. I do have an umbrella policy; I’ll see what that covers.

[Coronita]

[quote=zk][quote=Coronita]Might be covered by an umbrella insurance policy. Don’t know, check with your underwriter of your umbrella if you have one..

umbrella insurance is pretty affordable: $5-10million policies go for about $1000..

you do need to maintain a minimum liability coverage across all your assets though.
It’s probably around $250k+ for each home and $250k+ for auto and watercrafts (at least that is the case for me)

There are some exclusions or limits but none of those I think are relevant to this situation. The primary exclusions/limits these days is apparently liability insurance for slander and libel on social media…I’m not kidding…

I think my umbrella is through a company called RLI. It doesn’t have to be the same as your homeowners and auto, you just need to maintain the minimum liability on the rest of your insurance. I’m sure of that…because I have a hodgepodge of insurance…my primary is through one agency, my rentals through another, most of my cars are through allstate, but two are through Hagerty because they are now old enough to be classified as “classic cars” lol.. it’s a royal pain, but the reason is I have the best coverage this way for the lowest price
.. no issues with the umbrella coexisting with multiple insurance.[/quote]

Thanks for the tips. I really appreciate it. I do have an umbrella policy; I’ll see what that covers.[/quote]

Would be curious what the insurance co says, so do share after you find out 🙂

[sdrealtor]

Also curious as to costs to build. I really want to add 2/2 950 sq ft out back but it’s getting so expensive to build. If house keeps going up as I think it will I wont have a choice as market will be paying for it. Could PM if you prefer

[zk]

[quote=sdrealtor]Also curious as to costs to build. I really want to add 2/2 950 sq ft out back but it’s getting so expensive to build. If house keeps going up as I think it will I wont have a choice as market will be paying for it. Could PM if you prefer[/quote]

There is an existing cabana about 14’x18′. We will be enclosing it and adding to it, resulting in a 450sf adu with a kitchen, laundry closet/hookups, and bathroom. She quoted 38k, which is very, very cheap. Her previous work for us has come in on or under budget.

Part of the reason it’s so inexpensive is that part of the structure is already there (although it’s not enclosed). I’m really not sure how much cheaper that made it. I would also imagine that maybe her reduced insurance and bonding costs due to not being a licensed contractor have something to do with it. And maybe a desire to be competitive, too.

That cost includes the architect, the permits, and the construction, including flooring and fixtures.

It includes the minimum as far as fixtures, flooring, windows, doors, etc. If we want anything fancy, that will increase the cost.

[zk]

[quote=Coronita]
Would be curious what the insurance co says, so do share after you find out :)[/quote]

The insurance company said that injuries to workers (which is my primary concern) would be covered under my homeowners/umbrella. She said that ideally they would have their own insurance and I would be secondary. That doesn’t look like it’s going to happen, but she did say that I’m covered.

[gzz]

The “secondary” insurance is whoever has the 2nd deepest pockets, the primary is the deepest.

If the injury is really bad, the insurance company will try to get out of paying it.

This may be why workers comp is so expensive, it is no fault. Anything short of a deliberate self harm is covered, even if you do something really stupid at no fault to your employer.

How dangerous is being a lawyer/paralegal in an office? One who never has and never will do anything involving criminal or family law, where you get crazies sometimes?

According to what we pay in workers comp, it is slightly safer than being an underwater welder. Just barely.

[gzz]

SDR, running utilities to your ADU could either be fairly simple or double the project cost, if your current setup is too small to be simply extended to the ADU.

I asked a developer about preserving my house and building a triplex behind it versus just tearing it down for 4 units. He said completely new hookups are needed and building around an existing one is extremely expensive and kills the economic advantage of building 3 instead of 4 units.

[Coronita]

[quote=zk][quote=Coronita]
Would be curious what the insurance co says, so do share after you find out :)[/quote]

The insurance company said that injuries to workers (which is my primary concern) would be covered under my homeowners/umbrella. She said that ideally they would have their own insurance and I would be secondary. That doesn’t look like it’s going to happen, but she did say that I’m covered.[/quote]

Interesting. Maybe as you embark on this project you can increase your umbrella temporarily to say some higher limit, like $10mil. And then when you’re done with the project, bring it back down to whatever you currently have ….added protection. I always say it’s better to be over insured than under insured…

[sdrealtor]

[quote=gzz]SDR, running utilities to your ADU could either be fairly simple or double the project cost, if your current setup is too small to be simply extended to the ADU.

I asked a developer about preserving my house and building a triplex behind it versus just tearing it down for 4 units. He said completely new hookups are needed and building around an existing one is extremely expensive and kills the economic advantage of building 3 instead of 4 units.[/quote]

I’ve got existing gas lines back there for a fire pit and barbecue I can tap into. Planning to put solar on the roof and there’s a separate 220 amp sub panel in back for a spa I removed years ago. I think plumbing will be bigger issue but master bath is in the back corner on that side so hopeful I can tap in there. also when the house was built new, my house was the last phase of the project. When I arrived to do my walk-through there was a set of blueprints sitting in the garage that I knew they would not be needing anymore so I threw them in my trunk. I have a complete set of blueprints from my house so locating anything I need to tap into won’t be a mystery.

with all that said I’m hoping to build something really nice, in fact while smaller it will be nicer than my house and will be my eventual home. I figure $300/sf to do what I’m thinking on a 2/2 1000 SF ADU. right now at 700 square-foot one bedroom condo near me runs about 350 K plus taxes and HOA. Seems like a no brainer long term

[svelte]

[quote=Coronita]
I think my umbrella is through a company called RLI. It doesn’t have to be the same as your homeowners and auto, you just need to maintain the minimum liability on the rest of your insurance. I’m sure of that…[/quote]

I would be afraid you’ll end up with insurance companies pointing the finger at each other in a situation like this.

I have all mine through the same company…I probably pay a tad more but it will be harder for them to deny a claim.

I also stay with well known companies. My dad went with some small insurance company for his rentals. One of the rentals had a major fire while occupied by a tenant and the insurance company refused to pay. He had to take them to court to collect from them. Lots of time, hassle, and sleepless nights to save a few bucks.

[zk]

[quote=Coronita]

Interesting. Maybe as you embark on this project you can increase your umbrella temporarily to say some higher limit, like $10mil. And then when you’re done with the project, bring it back down to whatever you currently have ….added protection. I always say it’s better to be over insured than under insured…[/quote]

Dang, that’s a really good idea.

[Author]

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