Jennifer Watson Insurance Advisor View Bio

Many business owners have learned the importance of hiring an independent contractors who have their own workers’ compensation insurance. Many think that if a subcontractor is a sole proprietor, partnership or one or two person corporations with no employees that they do not need workers’ compensation coverage. True, they are not required by New York State to have workers’ compensation coverage, but New York Workers’ Compensation Law Section 56 provides the general contractor or its carrier is liable for payments of an uninsured subcontractors workers’ compensation benefits. Should the uninsured subcontractor get injured while performing work for you, they could file a claim under your workers’ compensation policy. As a result of this potential claim exposure, your insurance company will charge you premium for the uninsured subcontractor based on the total labor incurred. Note that the labor and material needs to be clearly separated and documented in order for the auditor to include only the labor payroll versus the total cost of the job.

How Can You Be Sure The Subcontractors You Hire Have Workers’ Compensation Insurance?

There are two ways you can determine if a subcontractor has their own workers’ compensation coverage.

  • 1. Request they provide you with a certificate of insurance – Check the certificate be sure the effective dates of their policy is for the time period they will be working for you. If their policy expires February 1st, 2016 and they will be working for you until April 1st, 2016 you’ll need to obtain an updated certificate of insurance when their policy renews on 2/1/16. Pay special attention to the Named Insured listed on the certificate – it should match the person or entity on the invoice they give you and who you are paying for the work.
  • 2. Check to See If Coverage Is In Place – On the New York Workers’ Compensation Board website you can search to see if a subcontractor has current workers’ compensation coverage in place. Click here to see the employer’s name, insurance company and effective dates of the policy (Feel free to contact me with questions about this service).

    • These two steps may add a small amount of time to your already busy days, however, they could save you thousands of dollars in the end. If you have questions about hiring independent contractors with workers’ compensation, talk with our team

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