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The Law & You

Do I Need Workers Comp and Liability Insurance for My Company?

The Law & You
August 13, 2018

The Law and You

Do I Need Workers Comp and Liability Insurance for My Company?

A construction company owner wants to know if he needs workers compensation and liability insurance, even though he employs subcontractors. What’s the answer?

Dave Kuharchik: Business related question in this edition of “The Law & You.” Attorneys Greg Fellerman and Ed Ciarimboli are back in the virtual law center. Guys, it’s always a pleasure.

Ed Ciarimboli: Hey Dave, we are ready to get down to business.

Dave: You are. You are not going to joke around tonight. All right, here’s the question tonight and it involves a construction company. Mike in Bear Creek says, “I own a small construction company. Do I need both workers compensation insurance and liability insurance? Everyone that works for me as a subcontractor.” What can you tell Mike?

Ed: Mike, you should absolutely have both. Obviously, the liability insurance is going to be in case anybody gets hurt on the job site because if you did something in a negligent fashion — the workmanship in a negligent manner, didn’t secure the job site appropriately, things of that nature. You should have workers compensation insurance, it’s the low. Your employers may be subcontractors, you are an employee of your own company. You can technically get workers comp if you got hurt on the job. But it’s good to have it because, at times, the subcontractor status may change depending on the nature and the scope of the work. You do need to have it.

Greg Fellerman: The owner one is very common. People don’t insure themselves when they own their own business, which is just stupid. And then the next part is the changing of the way the job is being handled. Sometimes, a subcontractor can get hurt on your job and we can argue that “Well, you have it classified as a sub, but under the law, he can be construed as an employee.” And you will be caught with your pants down with no insurance. Talk to your agents; obviously, if you have questions, give us a call. We can help you as much as we can with it.

Ed: Just because you say they’re subcontractors doesn’t necessarily mean under the eyes of the law they are a subcontractor. There are 10 criteria you have to look at in order to make a determination whether that individual is a subcontractor. And if they’re not, then you can be in big trouble.

Dave: And if you need clarification, there is the number, there’s the website. Results matter, attorneys Greg Fellerman and Ed Ciarimboli. Guys, we’ll see you next time.

Greg and Ed: Thanks, Dave.

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