Contractors and Insurance

traceyb · September 2006

Our company has a policy of requiring outside
"contractors" to show evidence of WC insurance
as a condition for the contract. I believe this
is a fairly standard deal. Recently, we contracted
with an LLC which supplies technical writers
for our certification consulting staff. As usual, we asked for evidence of WC insurance on their subs,
and the contractor became irate - no need, these
people are telecommuters working off-site, etc.
I guess I understand that the scenario is different
from exposing temps to our working environment, but
oil spreads wide on the legal pond these days -
can anyone comment on this?

Thanks,

Tracey
Michigan

SMace · September 2006

If I had a contractor get irate with me over this I would end their contract.

However, in the interest of getting the job done, I would tell them they have 5 days to get it to you or the job is over. Athough I have none, it is my understanding that off-site workers would still be covered under WC if they are working. If the LLC doesn't have coverage and something happens they will likely sue you for coverage and would have a case if you allow this one group to skate by. You are merely protecting your company and if they give more grief I would tell them to stick it.

LarryC · September 2006

I guess I would demand it nonetheless. In some cases, even if employees are telecommuting, they are covered under the company's W/C insurance depending on the arrangement. And depending on how your policy reads, "part B" of your policy could afford the subcontractor's employee some coverage under YOUR policy. So I would make sure that the certificate of insurance they give you has the W/C included.

Dutch2 · September 2006

We end up paying considerable funds every year to our WC provider due to our outside contractors not providing their own WC coverage. Not sure; it may vary by state. Here you must have so many ee's before your are required to provide WC for your ee's. We have to report to our WC provider every outside contractor we use each year. Many of them are Mom & Pop operations that clean our facilities at night, cut the grass, clean the windows, lock smiths, plumbers, etc. the list is quite long. We end up paying our WC provider just under 10% (9.75% or something close) of what we paid the contractor to preform their task. If the contractor does not provide their own WC we add 10% to their bid, simply because we will have to pay it at year end.

WT · September 2006

Actually telecommuters would make me more nervous than subs on site. Here is a whole new world of exposure. If a person gets hurt at home while working, is it of and in the course of their duties so they get comp??? If there are unsafe conditions (toys on the stairs to the basement office), does the employer have a duty to ensure a safe workplace???

Bottom line: Make sure these people are covered rather than taking a chance of being sued due to some partial liability theory.

NeedCoffee · September 2006

tracyb -

We ran into this problem a few months ago. In addition to requiring proof of insurance (which you should do, no matter how irate he is), we also require contractors to sign a hold harmless agreement/release for any work related claims. This covers all bases, and is a condition of contracting with us. If a contractor refuses to sign or provide proof of insurance, they can't work with us. Shoot me an e-mail if you'd like a copy.

Sarah

Raymond SPHR · September 2006

To Sarah:

You have it spot on! That is exactly what people should be doing. If a contractor cannot comply with said requirements then they don't get the work-pure and simple.

I am surprised more people don't do this. I, too, have being doing it this way for years now.
Raymond

traceyb · September 2006

Thanks to all of you for some great advice!
As always, you've steered me in the right direction.

Geez, I love the forum.

Tracey

Contractors and Insurance

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