As you probably know by now, you are required to carry workers’ comp coverage for anyone you have working for you. This includes employees and subcontractors without their own Certificate of Insurance (COI). Since subcontractors do varying amounts of work for you, you may opt to hire subcontractors who have their own COI. If you do this, there are some important steps to make sure that your subs are actually covered:
- Request COI. This is the first step. If the subcontractor does not have a Certificate of Insurance, you need read no further. Without a COI, you must carry coverage for these subs.
- Does the COI include Workers’ Comp Coverage? If the subcontractor has a COI, make sure that it shows that they are covered for workers’ comp. Under the workers comp’ section, make there is a policy number (not just "TBD” or "TBA”), and that the dates you’re hiring them fall within the range of the "effective” and "expiration” dates.
- Verify the policy. While the time you’re hiring the subcontractor may be within the "effective” dates, any number of problems could occur with their policy. Call the insurance company on the COI to confirm the policy is still valid.
Following these steps stands to benefit you. If you do not take the time to verify the COI, the workers’ comp coverage, and an effective policy, you will be responsible for their coverage, and you may owe money at the time of your audit. Feel free to contact Christy Nihart in LCI’s audit department at 985- 612-6734 with any questions.