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Uninsured Subcontractors

How does having uninsured subcontractors affect your insurance?

Subcontractors are great for business. They help you get work done that might not be your specialty. You also don’t have to worry about paying their taxes or paying for benefits. Sounds good? Let’s get some subcontractors on board!

 What’s the disadvantage of using subcontractors?

 Some subcontractors don’t have insurance. That’s a BIG NO NO! Sometimes it’s difficult to make the distinction of when this person is a subcontractor or if they’re actually an employee. This distinction can have major financial implications. If the State determines that the person working for you is actually an employee, they would be entitled to Workers Compensation benefits under your policy if they are ever injured on the job. Other factors such as the time of the injury and the employer requirements of the contractor will also determine the workers’ rights. Carriers may also cancel your policy for using subcontractors without insurance as they are now insuring your subcontractor as well as you. They would prefer that you provide certificates of insurance for your subcontractors during your annual audit.

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