PEO's, Certificates of Insurance and Subcontractors

Wed, Nov 09, 2016 at 10:45AM

If you employ subcontractors, independent contractors or casual labor, check to make sure they have active workers' comp coverage. You should require a Certificate of Insurance proving coverage and call the Bureau of Compliance at 850-413-1609, option #2, or go online, to verify that coverage is valid. 

Do not take the certificate at face value - protect yourself and verify coverage. If a subcontractor, independent contractor or casual laborer does not have coverage, they automatically become your obligation. You must report them on your monthly premium payroll report and pay premiums as if they were your employee. 

If the certificate expires or is cancelled during the time that you are utilizing the subcontractor, your workers' comp insurance carrier will have to invoice you for the amounts paid to that subcontractor, leaving your responsible for the premiums owed. 

Remember, if a subcontractor has only an exemption from cover form, they can have no employees working for or with them. You should also know that an exempt officer working in the construction industry must have a Construction Exemption and cannot be considered exempt under a Non-Construction exemption form.

If you use a subcontractor that utilizes a PEO (Professional Employer Organization) for their workers' comp coverage, be advised that this subcontractor could lose their workers' comp coverage without any prior notification to you or your subcontractor. If this occurs, you could be held responsible for this subcontractor's premiums and claim exposures. 

To protect yourself, you should require a subcontractor's workers' compensation coverage with a PEO every week prior to using the subcontractor, and you should demand a list of employees of the subcontractor from the PEO every day that the sub works for you. You should then verify that only those employees provided to you by the PEO are the ones actually on your job site. 

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