Contractor General Liability Insurance And Workers´ Compensation Insurance Savings Up To 38%!
Myth #2: Not Being Required To Carry Workers´ Compensation
Myth #2"I´m not required to carry Workers´ Compensation under state law because I don´t have four or more employees."
Reality #2The often quoted statement about "4 or more employees" (or 3 or more in some states) is much more complicated than it first appears. Case law resulting from lawsuits and administrative hearings has altered the true meaning of the rule. The actual rule can be summarized as you must carry Workers´ Compensation if you use 4 or more employees (including employees of your subcontractors) during a one-year time period.
So what happens if you´re required to carry Workers´ Compensation but fail to do so? Quite simply, if an employee or uninsured subcontractor is injured, they can now sue you on a direct basis (instead of collecting from your Workers´ Compensation Insurance Company) alleging that your negligence was the cause of their injury. Furthermore, the penalty for not carrying Workers´ Compensation is that you lose your legal right to assert your common law defenses (such as the injured worker´s own negligence was the cause of the injury). What this really means is that you will need to get your checkbook out and write a check for whatever they say the damages are because you will lose this lawsuit every time. Also, please understand that your General Liability policy does not provide coverage for these types of lawsuits.
Furthermore, attorneys representing the injured party can more easily "pierce your corporate veil" and get to your personal assets if they can prove that you did not carry a Workers´ Compensation policy contrary to state law.
Sadler & Company, Inc.
3014 Devine St.
PO Box 5866
Columbia, SC 29250-5866
Toll Free (800) 622-7370 Local (803) 254-6311
Fax (803) 256-4017
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