Does Workers Comp Cover Subcontractors in Construction and Other Industries

In construction and other industries, subcontractors often work alongside general contractors, but their worker's compensation coverage can be a gray area. Workers comp does cover subcontractors in some cases, but it's not a straightforward answer.

In general, subcontractors are considered independent contractors and are responsible for their own worker's compensation insurance. However, some states require general contractors to carry worker's compensation insurance that covers their subcontractors.

A key factor in determining coverage is the nature of the subcontractor's work and their relationship with the general contractor. If a subcontractor is working on a project for a general contractor, they may be considered an employee and entitled to worker's compensation benefits.

As a business owner, it's essential to understand the requirements for workers' compensation insurance. You must obtain and maintain workers' compensation insurance to protect your employees in case of injuries.

To ensure compliance, display a Notice to Employer of Injury Poster (WC 50) at all times. This poster is a crucial document that provides information to employees about workers' compensation insurance.

You're also required to keep a record of all lost-time injuries and occupational diseases. This record will help you track and report any work-related injuries to your insurance carrier.

Reporting all injuries to your insurance carrier within 10 days is also a must. This timely reporting will help prevent any potential fines or penalties.

A designated provider list must be maintained and provided to the injured worker. This list will help the worker access medical care and treatment.

Upon an employee's return to work or termination from employment, you must file a Supplemental Report of Return to Work form with the insurer. This form will help update the insurer's records and ensure compliance.

Here's a quick summary of the business requirements:

If you use contractors to perform construction work, you must make sure they meet workers' compensation requirements or you could be fined.

If a contractor has no employees, they must be covered by workers' compensation insurance unless they choose to reject coverage.

To reject coverage, a contractor must meet certain criteria, download and submit the PDF version of the rejection form, or file a Rejection of Coverage online.

Subcontractors are technically covered under your workers' comp policy if they don't have their own coverage in place.

You'll be charged for their payroll if they're covered under your policy.

Employers with workers' compensation insurance have a key legal protection: they can't be sued for most lawsuits by injured employees.

Employers with workers' compensation insurance also have the DWC's dispute resolution process to resolve claim disputes.

You can provide workers' compensation for your employees by buying a policy from a licensed insurance company, self-insuring, or joining a self-insurance group. Cities and counties may also buy coverage from insurance companies, self-insure, or join with other cities and counties that self-insure.

You must have at least one employee to buy workers' compensation insurance, and some insurance companies will sell a policy to cover executive officers of a business that has no other employees. You can also buy insurance if you employ contractors who don't have workers' compensation.

You can't charge your employees for workers' compensation coverage, except for independent contractors and construction workers. If you're a subcontractor, you may need to buy a workers' comp policy to get hired for certain jobs, as it will be required in your contract or the employer will ask for a Certificate of Insurance (COI) before you start.

You can reference the following options to provide workers' compensation coverage:

Providing coverage for your employees is a crucial aspect of running a business. You can buy a workers' compensation policy from a licensed insurance company.

You must have at least one employee to buy workers' compensation insurance. The employee may be part-time, and some insurance companies will sell a policy to cover executive officers of a business that has no other employees. You can also buy insurance if you employ contractors who don't have workers' compensation.

You can't charge your employees for workers' compensation coverage. There are exceptions for independent contractors and construction workers.

You can provide workers' compensation coverage in several ways: buying a policy from a licensed insurance company, self-insuring your workers' compensation claims, or joining a self-insurance group.

Here are the options:

Some employers may self-insure their workers' compensation claims. Employers who self-insure pay the cost of their claims themselves. You must get approval from DWC and meet financial requirements.

You can also join a self-insurance group. The group must get approval from TDI. The group members must be in the same or similar business and meet other requirements.

If you can't find a company that will sell you a policy, you can buy from Texas Mutual Insurance Company.

Health care networks can be set up by insurance companies, government entities, self-insured employers, and self-insurance groups to treat injured workers or contract with existing networks.

TDI must certify these networks, which can lead to lower premium costs for employers who have coverage with an insurance company that uses a network.

Cities and counties can contract directly with health care providers, giving them more control over their workers' compensation health care.

This can be a more cost-effective option for employers who don't want to deal with an insurance company's network.

Hiring uninsured workers can be a recipe for disaster. You'll be charged additional workers' comp premiums at audit for any uninsured contractors.

If you don't have a workers' compensation policy, and your subcontractor doesn't have one either, you'll have to pay for their medical bills out of pocket if they get hurt on the job.

You'll be risking the cancellation of your own workers' compensation policy if you have claims from uninsured subs. This is a serious financial risk that can have long-term consequences for your business.

Here are some of the potential risks of hiring uninsured subcontractors: