Contractors and the need to carry workers compensation insurance for general contractors.
EXPLAIN: Workers Compensation Insurance for Contractors: Sub contractors routinely call this agency to confirm the correctness that a general contractor has requested proof of workers compensation insurance from the subcontractor. Two questions need be considered.
1) Are subcontractors required to carry workers compensation to work for general contractors?
2) Should “owners” be included?
Sub contractors working for general contractors, doing commercial work, working for condo associations, real estate development, or maintenance companies, are required to carry their own workers compensation insurance AND the “owner” must be included. “Owner” is defined to be a sole proprietor, partner or LLC managing member. (corporate officers are not owners, they are employees of the corporation)
The general contractor’s workers compensation policy provides coverage for employees. Sub contractors are employees unless they carry their own workers compensation coverage. It is necessary to have your own WC policy so that the GC’s policy does not pick up the subcontractor as an employee.
When a worker compensation policy is purchased the application requires the owner to choose to be included or excluded. The choice is made for the entire year. After the policy is written the policy cannot be changed. When a subcontractor works for a GC etc. the “owner” must be included. If excluded, the GC will reject the proof of workers compensation coverage therefore making the contract or agreement invalid.