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Published on Aug 14
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Workers’ compensation insurance allows employers to provide for the health and safety of their employees following a workplace injury. Since independent contractors are not considered employees, they are not eligible to be covered under an employer’s workers’ compensation coverage. The injuries sustained by independent contractors on your worksite can leave your company open to liability, especially if a court determines that the injury was due to negligence on the part of one of your employees or your company. Rather than leaving your company’s financial future at risk, you can take steps to ensure that you are protected in the event of an injury sustained by an independent contractor.
What is an independent contractor
An independent contractor is someone who provides services that are unrelated to the employer’s primary business and who offers these services to the general public. An employee is someone for whom you, as an employer, control what work is to be performed, when the work is performed and where the work is performed. Since no direct employee relationship exists, independent contractors aren’t covered under your workers’ compensation policy.
Workers’ compensation option
Although independent contractors are not covered under your workers’ compensation policy, they may elect coverage for themselves if they are sole proprietors or partners. If an independent contractor or subcontractor controls the selection of materials, traveling routes and quality of performance of another worker, the Ohio Bureau of Workers’ Compensation considers them an employer and, as such, they are required to provide workers’ compensation coverage for that worker. One layer of financial protection that you can offer your company is to require that all independent contractors you work with have workers’ compensation insurance for themselves.
Independent insurance options
Independent contractors may not be covered under your workers’ compensation policy, but that doesn’t mean that there is not a way for your organization to protect yourself against lawsuits while providing some coverage for injuries sustained by these workers. Since every company is required to carry a general liability insurance (GLI) policy, you can provide additional financial protection for injury coverage by adding an additional insured endorsement to your existing GLI policy.
Among other things, GLI coverage protects your company when a third-party, like an independent contractor, is injured on the premises. GLI coverage can cover medical expenses, legal fees, witness costs, and more in the event of an injury or lawsuit resulting from an injury. For independent contractors injured while performing services for your company, your GLI coverage can pay for medical costs related to the injury. If you are sued by an injured independent contractor, your GLI policy can also pay for legal fees and court-awarded compensation.
In the absence of workers’ compensation coverage for volunteers with nonprofit organizations, the only route left to keep your organization covered in private or independent insurance options. Keeping your organization protected while meeting the needs of your volunteers is critical to the success of your nonprofit.
Protect your company
Protecting the financial safety of your company and the health of your independent contractors is a top priority for you. Making sure that you’re covered in case of a personal injury claim from an injured independent contractor means ensuring that you have all of the appropriate layers of insurance protection in place before an injury occurs.
Contact a Sheakley Workers’ Compensation expert today to learn more about how workers’ compensation applies to your business. Working with more than 16,000 employers across Ohio, Sheakley’s Workers’ Compensation team has the experience to help you make the best decisions for your organization.
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