by Kenneth A. David, Esq.

Employers do not have to carry workers’ comp coverage if they have less than 3 employees. There have always been smaller subs used by general contractors; however, in a down economy, the size of many subs has shrunk and employees who are laid off are starting their own businesses. Also, subs are looking to cut costs, just like everyone else, and not having to pay for comp insurance certainly is an option if a sub has only 1 or 2 employees. However, if a sub does not have insurance – either because they do not need to legally or because they simply did not get it – the general contractor (or an immediate contractor) is likely to be held responsible for the workers’ comp claim as a statutory employer. General contractors can require subs to carry workers’ comp insurance even if the subs do not legally otherwise have to get it. Generals also can use a CCIP (contractor controlled insurance program) to provide insurance for all subs on their job site. This avoids the situation where the sub says it has insurance – and there might even be a piece of paper saying so – but the general learns after an accident there was no insurance.