Alex What is a subcontractor for insurance purposes?
Who is a Subcontractor? First, let’s understand this definition from an insurance perspective: A subcontractor is one who brings their own tools, manages their own work, and carries their own subcontractor insurance. If they do not carry their own subcontractor insurance, they are simply your part-time employee.
Are subcontractors covered under my insurance?
In most cases your insurance will not cover your subcontractors. In some cases it may be found that both you and your subcontractor are responsible for a property damage or personal injury claim. This is known as shared responsibility, and generally a percentage will be allotted to each of you.
Can a subcontractor be covered by workers’comp?
This subcontractor works for the company every week, all year long, and doesn’t do any work for other companies. This person could possibly be considered an employee and would be covered by the drywall company’s workers’ compensation policy. Alternatively, let’s say that same drywall company has a project that requires electrical work.
What do you need to know about subcontractor insurance?
The subcontractor’s certificate should name you additional insured, have an expiration date and confirmation that the policy is currently in effect. This protects you and your assets in the event the subcontractor is lying or does not have adequate coverage. Does General Liability Insurance Cover Subcontractors?
What’s the difference between an employee and a subcontractor?
Contractors and employees are handled differently according to tax and employment laws. Subcontractors pay their own employment, social security, and medicare taxes, while employers must pay these taxes for their employees. As a business owner you must provide W-2 forms to your employees, and 1099 forms to your subcontractors.
When are subcontractors considered employees by SFM mutual?
If a policyholder answers yes to any of these questions, this could indicate that the subcontractor will be considered an employee. For a more in-depth look, refer to the “Hiring subcontractors” CompTalk, available for order or download in the resource catalog on sfmic.com.
The subcontractor’s certificate should name you additional insured, have an expiration date and confirmation that the policy is currently in effect. This protects you and your assets in the event the subcontractor is lying or does not have adequate coverage. Does General Liability Insurance Cover Subcontractors?
When are subcontractors considered employees under workers comp?
Sometimes, laborers who receive 1099 forms are considered employees and are therefore covered by workers’ comp. One potential example would be a drywall company that uses a subcontractor, paid through a 1099 form, to do their drywall work.
Can a subcontractor be covered by SDI insurance?
SDI may not be appropriate for all projects or even for all subcontractors, but with the growing popularity of SDI programs (due in part to their lower costs compared to payment and performance bonds) owners will need to know more about the details behind how SDIs are used. It is not enough to be satisfied that a project is covered by insurance.
If a policyholder answers yes to any of these questions, this could indicate that the subcontractor will be considered an employee. For a more in-depth look, refer to the “Hiring subcontractors” CompTalk, available for order or download in the resource catalog on sfmic.com.