If you are a residential contractor without any employees, as of August 2nd 2017 you are no longer required by law to show proof of workers compensation insurance. Although, going without worker’s compensation insurance could potentially leave you exposed, you aren’t required to obtain it. If you are a residential contractor and you do have one or more employees, this new law does not apply and you are still required by law to carry worker’s compensation insurance.
If you fall into the solo operation category as a residential contractor, meaning that you do not have any employee's, please be aware of the exposures or challenges you might face if you decide not to obtain some form of workers compensation insurance:
- Contractors run the risk that the courts or the Workers Compensation Commission will rule that someone the contractor classified as a subcontractor was actually classified as an employee.
- Contractors can be held responsible for injuries to employees of their subcontractors.
- If a contractor does not have Workers Compensation insurance, contractors limit the pool of subcontractors they can hire.
- A subcontractor who does not have Workers Compensation coverage cannot accept a certificate of non-coverage from another contractor.
- Contractors can potentially be held responsible for injuries to a worker the contractor did not think was their employee.
In summary, if you do decide to go without workers compensation insurance, just know that there could be potential for exposure and if any person along the line (subcontractor, employee, etc) did not have coverage in place, the courts have ruled that the liability comes back on the prime contractor.
If you have any questions about workers compensation insurance or if you are unsure if you are required to have it , please contact our MFS team or stop by any of our office locations in the Forrest City, Marianna, and Stuttgart areas.
Marianna (Smith Insurance): 870-295-2588
Forrest City (Flanagin Insurance): 870-633-1934
Stuttgart (Crum Insurance): 870-673-8586
Stuttgart (Smith & Company): 870-673-7221