Workers Comp Exemptions

importer

I'm kinda new to the business end of the industry. I formed my company only a year ago and have been struggling with getting licensed but finally pulled it off. If one is allowed to exempt themselves from carrying w/c. What do I need to require from a sub? Say I hire a guy named Diego to do some drywall work for me, now Diego says he is exempt. How does my insurance company determine that he is exempt or are they going to hit me with a bill? Lets say he has two more guys with him, how does my insurance company know that two more guys are working on my jobsite or that I did not just pay Diego to complete the job by himself. Must I also require a sub to carry their own commercial liability coverage? Will I get hit with a bill in the same way as a workers comp audit? Could I avoid all this headache by just holding say 18 percent or so unless they could provide me with certificates. This would probably irritate some people though. I'm nowhere near ready to hire a payroll employee. The work is not steady yet. Any guidance would be greatly appreciated.

thom

Depends on your state.

In my state, you are not exempt. If you ever hire a single employee or a single sub you must have WC. No exceptions. You are not required to have WC if you work alone, and never hire anyone. HOWEVER, that does not exempt any contractor who hires you from his requirement to cover you if you don't have it.

In my state, there is no way around it. You cannot hire a sub without him being covered. If he doesn't have it (because he works alone) you must have it and cover him.

dirt diggler

Thom's right - from what I understand at least - WC varies state to state



why ask here?

go talk to your insurance agent. Attornies and accountants will be good sources as well.

Diesel65

You will be better off contacting your insurance agent on this one, any good construction insurance company will set you up correctly.

The laws vary greatly from one state to the next.

importer

I'm in Maryland. Thanks for your reply, I guess I'll just call my insurance agent. I'llprobably wait until I've got a little more work going on.

tnt specialty

Just get certs for GL & WC from any and all subs.....

"Life's too short to play with your food"

Grumpy

The premise of exemptions is this: The owner of the company will not sue the ocmpany because he is essentially suing himself.

I carry workmans compensation. I am expent from that policy. If I fall off the roof, I have to use my own health insurance. If I hire an employee he is covered under the policy. I can not exempt anyone that is not a partial owner in the company (alot of people abuse this by putting their helpers as co-owners).

If I hire a subcontractor and he doesn't give me a certificate of insurance showing me as additional insured, my insurance company will charge me for their coverage.

I have to assume that the owner of the sub contracting company has exempted himself. The bottom line is insurance companies look for reasons not to fulfill their promise, meaning they try to find reasons why you were at fault and they don't have to pay. So if the sub contractor's insurance refuses to pay, guess who the next person they come after? You. Then if your insurance refuses to pay it gets passed to the property owner's insurance.