If you own a business in Rhode Island and you have employees on the payroll, you are required by law to carry workers compensation coverage. But when you obtain that coverage, do you really know what it covers and what it doesn’t? Even more importantly, do you know WHO it covers in your business?
If your business is a corporation, every employee will be covered if an accident were to happen to them during the course of their employment. It gets a bit trickier when your business is a sole proprietorship, partnership or LLC (Limited Liability Corp). In those cases, you need to know who can be identified as an employee.
If you hire subcontractors, those workers should have their own workers comp insurance through the contractor they work for. It would be prudent for you to check on their policy before allowing them to start any type of work for you. If it is found that those subcontractors do not carry workers compensation insurance, you may be held liable. And in order to have them covered under your workers comp policy, you will need to have their payroll added to your policy as well.
This may not seem like a big deal, but if your business does not typically hire employees like those you have contracted, the overall theme of your business may change in the eyes of the insurance world. For example, if you own a clerical business but hire a subcontractor to power wash your building you will definitely want to know that he has his own insurance. If he is injured in the process of power washing the roof, you do not want to be held responsible. Talk with your insurance agent about who is and who is not covered by your workers comp insurance policy today.