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Workers’ Compensation Isn’t Just for Businesses

October 30, 2012

Last year we wrote two comprehensive blogs on the topic of Worker’ Compensation: one discussing the sorts of coverages included in a Workers’ Comp. Policy,  the other explaining Workers’ Comp. premium calculations. We thought this might be a good time for another Workers’ Comp. discussion as it relates to individuals hiring sub-contractors and independent contractors because Workers’ Compensation insurance isn’t just for businesses.

As a refresher, remember that Workers’ Compensation insurance pays medical bills and lost wages to an employee who is injured on the job according to state law, regardless of fault. It is the employer’s responsibility to carry Workers’ Comp. insurance. But guess what:  it isn’t just businesses that need Workers’ Compensation Insurance. Individuals are sometimes subject to Workers’ Comp. requirements. For example, if you’re building the home of your dreams or just remodeling, you may be exposed to additional risk in the form of “employee hazards”.  Perhaps you employ a lawn maintenance service for your garden or domestic help for your household.  You may even have a Nanny.  These types of “employees” can leave you liable for injuries they suffer in the course of their employment.

One solution is to require written proof of insurance from your contractor(s) in the form of a Certificate of Insurance indicating coverage for all employees before any work gets started.  General Contractors performing construction and renovation should make this available to you upon request.  It is also common for lawn services or maintenance companies to have proof of insurance   Don’t forget:  it’s a good idea to request a Certificate of Insurance annually.

Should your contractor or maintenance service provider not have insurance, another option is for you to purchase a Workers’ Compensation policy to protect you from the risks associated with on-the-job injuries.  This may also be a good solution for domestic help or nannies hired as Independent Contractors.  Although the requirement varies state by state with regard to the minimum number of employees necessitating mandatory Workers’ Compensation Insurance, you can still protect yourself from being sued for employee injuries by purchasing a Workers’ Comp. policy.  Additionally, not only do you protect your liability as an employer, your employee – as an independent contractor – can collect for medical bills and lost wages from a Workers’ Compensation policy regardless of fault.

For more information on specialty insurance topics of interest to small businesses, be sure to subscribe to the Avanti Reader via RSS or connect with us on Facebook or Twitter (@AvantiInsurance) to receive automatic notification of future posts. As always, thanks for reading.

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