Do I really need workers’ compensation?
Recently we have had a lot of inquiries regarding workers’ compensation policies for small contractors without employees. These requirements are coming from their General Contractors, even though they do not have any payroll allotted to employees. The reasoning behind this request is to exclude these subcontractors on the GC’s workers’ compensation policies.
All workers’ compensation policies are based on employee payroll; however if you sub contract any of your work, your workers’ comp policy will charge for uninsured sub contractors. The way to get around this issue if you do not have any employees is to write a minimum premium ‘if any’ policy for the sub contractor. In this example, we will call him Joe Shmoe Contracting. This will meet your WC requirements on the certificate for the GC and it will allow for Head Honcho LLC, for example, to exclude Joe Shmoe Contracting’s payroll/cost for work on his workers’ compensation policy. Once Joe Schmoe Contracting has his own ‘if any’ policy he must then also require WC on the certificates of insurance from his subs so that he can exclude them on the policy. If he does not get certificates showing proof of WC coverage he will be charged for each uninsured subcontractor that he had for their payroll/cost of work at a rate per $100. This additional premium charge will be picked up at the time of audit, and will be due upon receipt. Also, at the time of the audit the renewal will be adjusted based on the audited exposures. To find out more information on workers’ compensation please call our office at 877-352-2121 or visit our website for more information on workers' compensation.