Not a day goes by that we don’t receive an email or call from an employer looking for help with a workers compensation audit or premium problem caused by a subcontractor!
Many of the problems we deal with come from the use of uninsured subcontractors and the effect they have on an employers workers compensation premium. I don’t know if it’s just poor communication between the agent writing the policy and the employer when the policy is originally set up or something else but I can tell you it’s an area that generates constant problems…the use of uninsured subcontractors! I’ve written about this topic many times and described many employers who get caught up at audit time in the uninsured subcontractor trap. How unfortunate and how avoidable is that!?!
Ok, so maybe it can be confusing for a new employer, setting up a policy for the first time, maybe with an agent who is not so familiar with the work comp rules, to understand all the problems that can be associated with using uninsured subcontractors.
So while there may be some exceptions out there let’s cut to the chase and just say this: You will be charged by your workers compensation insurance company for using uninsured subcontractors! And this may cost you a lot of money!
Sorry for the ranting…
So agents…make sure your clients understand the effect and ultimate cost using uninsured subcontractors may have on their policy. Now who was it that said…”Knowledge is Power?”
Thanks and I hope this post helps you out!