Workers' Compensation in the Golden Age of Independent Contractors

Do you ask for and receive all the certificates of insurance you need?

General contractors collect insurance certificates as a standard operating procedure. Every subcontractor provides a certificate or they don't walk onto the jobsite. This transaction defines the standard usage of the certificate.

But what about other operations?

Fundamentally, a certificate of insurance is a standard form which offers proof of insurance: workers' compensation, general liability, automobile liability, or any coverage required by the recipient.

The certificate outlines the coverage, the limits of the insurance policy and the relationship of the recipient to the contractor in terms of extended inclusion or exclusion under the policy.

This process clarifies which entity provides insurance for specific operations and which entities are insured under the policy.
Outsourcing is just another word for subcontracting. Payroll professionals serve a valuable service for many different companies in diverse businesses. If you utilize this service, you should require a certificate of insurance. Why? If an injury occurs while performing your assigned task, and the company is not insured for workers' compensation, your company automatically fills that gap in their coverage.

An electrician wires a new wall outlet in the office. Get a certificate.

The coffee service provider injures their back stocking your supplies. Protect your company by requiring a certificate prior to entering your premises.

Any entity providing a service to your office must offer proof of workers' compensation and general liability insurance or their losses become yours.

This standard operating procedure will sound extreme to some risk managers, so listen you owners: the insurance companies are beginning to look for these situations to charge you a premium.

Contractors have been subject to these audit add-ons for years. It's part of the business. Manufacturers and office risks have not, except for temporary contract labor directly associated with operations.

The insurance companies awakened to the subcontractor economy. Very specialized services outsourced by mainstream business are now a rich source of additional premium, but an equally scary source of job related injuries and liabilities.

Go through your list of suppliers, outsourced service personnel, grounds keepers, window washers, or any temporary or part-time labor providers and ask for certificates of insurance: workers' compensation and general liability at a minimum. 

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Further Reading
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