Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Deductibles work in your favor if you plan carefully. Moving collision from $500 to $1,000 typically lowers your premium, as long as you can actually cover $1,000 the day a claim happens. Keep an eye on your comprehensive deductible too, since flood and hail claims fall there. Don't cut liability limits to save money, though. Lowering liability saves little and leaves you exposed in exactly the type of claim Louisiana sees most.
The Homebuilders Self Insurers Fund (HBA SIF) is a member-owned, non-profit workers' compensation pool for Louisiana construction businesses. Members pay premiums that cover claims and administrative costs, and any surplus may be returned as dividends. It typically fits contractors who want an alternative to a traditional insurance carrier and accept some shared responsibility.
Picture a framing contractor in Covington with eight employees and a renewal notice that just jumped again. Someone at the local builders' association mentions "the fund," and suddenly a new option is on the table. This guide explains what the Homebuilders Self Insurers Fund in Louisiana is, how it works, and whether it makes sense for a business like that one.
Understanding the Louisiana Homebuilders Self Insurers Fund
The HBA SIF is a group self-insurance fund. It is not an insurance company in the usual sense. Instead of buying a policy from a carrier that answers to outside shareholders, a group of Louisiana construction businesses pools their premiums to pay workers' compensation claims for one another.
The fund describes itself as a member-owned, non-profit pool where premiums pay for claims and administrative costs, with surplus funds going back to policyholders. Its own materials also state the key difference plainly: "Unlike traditional insurance companies, the HBA SIF is owned by its policyholders."
Members also run it. The 2026 Executive Committee is led by Chairman Scott Wallace of Melot Construction LLC, with Vice Chairman David Champagne and Secretary Randy Noel. People from the industry make decisions about claims philosophy, safety programs, and finances. That shared ownership shapes almost everything else about how the fund behaves.
How the Workers Comp Fund Works for Local Contractors
The mechanics resemble a regular policy more than most contractors expect. You apply, the fund underwrites your business by looking at payroll, job classifications, and claims history, and then it sets a premium. When a worker gets hurt on a job site in Slidell or Mandeville, the claim goes through the fund's administrator, much as it would with a carrier.
The fund still has to follow Louisiana's workers' comp rules. For injuries between September 1, 2026, and August 31, 2027, the state-mandated maximum weekly compensation is $903.00 and the minimum is $241.00. Medical mileage for claims starting September 1, 2026, is reimbursed at $0.725 per mile.
The money moves differently. Premiums go into a shared pool. At the end of a fund year, administrators total up claims, reserves, and expenses. If the group had a good year with fewer or less severe injuries, the leftover money may come back to qualifying members. A bad year can work the other way, which is why safety culture matters so much in a pooled arrangement.
Who Qualifies for Membership in the Fund
Eligibility is narrower than with an open-market carrier. The fund serves the construction and homebuilding community, so it typically looks for businesses tied to residential and light commercial building in Louisiana. Membership in the home builders association is generally part of the picture, because the fund operates as one of the association's insurance programs.
Typical candidates include:
- General contractors and custom home builders with W-2 employees
- Trade contractors such as framers, roofers, electricians, plumbers, and HVAC installers
- Remodelers and specialty subcontractors working in residential construction
- Suppliers and related businesses connected to the building industry, depending on fund guidelines
Underwriting still applies, so being in the right trade is not the same as being accepted. A contractor with a string of recent back injuries or a weak safety program may be declined or quoted higher. Louisiana law requires workers' comp as soon as you hire your first employee, whether that person is full-time, part-time, or seasonal. That means even a two-person crew in St. Tammany Parish needs coverage from somewhere.
Comparing Self Insured Funds vs Traditional Insurance Carriers
Neither option wins in every case. The right fit depends on your claims history, cash flow, and how much shared risk you can tolerate. Here is how they typically differ:
| Feature | HBA SIF (Group Fund) | Traditional Carrier |
|---|---|---|
| Ownership | Policyholders | Shareholders or mutual members |
| Who qualifies | Construction industry, association-linked | Most industries |
| Surplus returns | Possible dividends | Rare, plan-dependent |
| Shared liability | Members may share fund obligations | Carrier holds the risk |
| Industry focus | Construction only | Broad book of business |
| Pricing driver | Group results plus your experience | Carrier rates plus your experience |
The most common mistake is comparing first-year premiums and nothing else. A fund quote might look close to a carrier quote, but the real value or cost shows up over three to five years, through dividends on one side and possible assessments on the other. Carriers may also offer pay-as-you-go billing tied to payroll software, which can help seasonal builders whose crew size swings between spring and winter.
What Members Should Expect Regarding Benefits and Risks
Joining a self-insured fund means you share in the group's results, and that cuts both ways. Most contractors focus on the upside, so the downside deserves equal attention before you sign the indemnity agreement.
Potential for Dividends and Surplus Returns
This is the main attraction. As of August 2026, the HBA SIF has returned a cumulative total of more than $100 million in dividends to active qualifying participants since it began. For a contractor paying meaningful annual premium, getting a portion of that back can noticeably lower long-term costs.
Dividends are never guaranteed. They depend on how the fund performs as a whole, and they usually go only to members who stay active and qualify under fund rules. If you leave the fund after a few years, check what happens to dividends from fund years still being closed out.
Joint and Several Liability Explained
Under Louisiana's group self-insurance structure, members are typically jointly and severally liable for the fund's obligations. In plain terms, if the fund ever came up short because claims ran well above projections, members could be assessed to cover the gap, even if their own crews had no injuries.
Strong reserves and reinsurance make this unlikely in a well-run fund, but unlikely does not mean impossible. Read the indemnity agreement closely and ask how long your obligation lasts after you leave. Our agency's view is simple: you should understand that clause as well as you understand your premium.
Common Questions About Louisiana Construction Insurance
Workers' comp is only one piece. Here are questions builders on the Northshore often ask.
Do I need workers' comp if I only have one part-time helper? Yes. Louisiana requires coverage once you hire your first employee, including part-time and seasonal workers.
Can I just use 1099 subcontractors to avoid workers' comp? Not safely. If a subcontractor lacks coverage, you may be treated as the statutory employer and end up responsible for their injury claim. Always collect certificates of insurance.
Does the HBA SIF cover general liability too? No. The fund handles workers' compensation, so you will still need general liability, commercial auto, and possibly builders risk coverage through a separate policy.
What is the new Preliminary Determination procedure? The 2026 Legislative Session created a process that lets employers provisionally accept a claim while still defending it through trial. The goal is to help avoid potential penalties and attorney's fees.
Will my rate go up after one claim? It may, depending on the claim's severity and your experience modification. A single minor medical-only claim usually affects pricing far less than a lost-time injury.
Can I switch from a carrier to the fund mid-year? Usually it is cleaner to switch at renewal. Canceling mid-term can trigger short-rate penalties or audit complications.
Making the Right Choice for Your Contracting Business
The fund can be a strong fit for an established Louisiana builder with solid safety habits, steady payroll, and room to accept some shared risk in exchange for possible dividends. A traditional carrier may suit a newer contractor, a business with recent claims, or anyone who wants the risk to sit entirely with the insurer. Both are legitimate choices, and the right one depends on your numbers rather than what a competitor down the road uses.
Aubert Insurance Agency has been insuring what matters most since 1910. As an independent agency, we compare options from multiple carriers in one place and explain how each contract works, including exclusions and the fine print on shared liability. Talk with an experienced agent who can weigh the fund against a traditional policy based on your crew size, trade, and claims history before your next renewal.
Ready to see where your business lands? Start a Quote today, and we'll help you match your coverage to your actual risk.
About the Author
Kyle Beerbohm
President
We've been independent since 1910, and four generations of local ownership have kept us that way. We're one of the oldest agencies in St. Tammany Parish and the fourth oldest business in the City of Covington. I treat that history as a responsibility rather than a plaque on the wall. My job is to keep us answering to the families and business owners who walk through our doors, and to keep serving this parish for another hundred years.
