EXCAVATION INSURANCE GROUP
Can Subcontractors Carry Their Own Workers’ Comp?
Excavation Insurance Group explains why subcontractors should carry their own workers' comp, and how to verify it so their payroll doesn't land on your audit.
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Quick answer: Excavation Insurance Group on this: Yes, and it’s the standard practice: subcontractors are expected to carry their own workers’ comp policy rather than relying on yours. The key is verification, get a current Certificate of Insurance from every subcontractor before they set foot on your job, or their payroll can get folded into your own coverage and rated at your cost.
WHY VERIFICATION IS THE WHOLE GAME
A subcontractor telling you they’re covered isn’t the same as them actually being covered on the day they’re on your site. Certificates of Insurance can lapse, get cancelled for non-payment, or simply expire between when you first collected one and when the job actually happens. Confirm the certificate is current at the time work starts, not just at contract signing, and keep a copy on file. This isn’t paperwork for its own sake, it’s what protects you at your next workers’ comp audit.
WHAT HAPPENS IF YOU SKIP VERIFICATION
If a subcontractor shows up without active coverage and you didn’t catch it, an auditor will typically treat that subcontractor’s payroll as if it were your own employee payroll and rate it at your classification code, which can add a meaningful, unbudgeted cost to your next audit. Worse, if that uninsured sub gets hurt on your job, there’s a real chance the claim lands on your policy by default, since they had no coverage of their own to respond to it.
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Related: Workers’ Comp for 1099 Subcontractors on Excavation Crews · Classification Codes and How They Affect Your Premium
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