# How Protect Self?: Employee -vs- Sub-Contractor



## StihlRockin' (Apr 24, 2008)

To me it's cut and dried the differences between employee -vs- sub-contractor, but can understand how the line can be a grey area sometimes.

How does a contractor protect himself in the event of an accident occurred by the sub-contractor? What if the sub-contractor comes back to say he was an employee and not a s-contractor?

What if the sub-contractor is under or not insured?

I want to be able to outsource work more, but also want to make sure I'm protected in the event an accident occurs where I'm not liable... or should not be liable.

I'll have my own insurance and protection for my regular help, but it's the sub's or independent contractors I'm inquiring about.

Your advice, opinions, etc, are appreciated.

*Stihl*Rockin'


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## BC WetCoast (Apr 26, 2008)

If you sub out your stumps for example, and all you do is give him a list of locations, then he is a sub contractor.

If you have a climbing sub contractor, who has to report at a specific time to work with your crew and takes some direction from you, then you should consider him an employee. 

If in doubt, I would error in having more insurance than less. 

If you have a sub doing your stumps, then you can demand to see his insurance. If he doesn't want to show it to you, then find another sub.

If the contractor is part of your crew, then I would consider him under your insurance.


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## Justice (Apr 26, 2008)

I agree with BC.
In addition you should get a cert of insurance from his company faxed to you directly. If he does not have insurance yours is primary. It is also your responsibility to get proof of his insurance, and that includes workman's comp. 

Many contracts have clauses where a sub is not paid until they can show proof of insurance. 

The easiest thing is to call you agent.... NOT THE INSURANCE COMPANY..... YOUR agent. If you deal direct with a insurance company and not an agent then disregard this advise. An agent will be able to tell you what covers your interests and he is working for you.. its part of his job.


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## OLD CHIPMONK (Apr 26, 2008)

In Ga. the sub shall carry his/her own workers comp. & liability ins.. Sign a contract with them, have it notorized & file a copy of insurance coverages & contract. They are also responsible , IRS form 1099 for thier own taxes. This will document them as a sub & protect you, if you should ever end up in court.


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## cjnspecial (Apr 27, 2008)

It varies WILDLY from state to state. Best thing to do is get a copy of his insurance cert from the insurance company or agent before he ever starts a job(don't accept a copy he keeps in his truck). Here's more good reading:

http://www.doli.state.mn.us/indpcont.html
http://www.doli.state.mn.us/indpcnst.html
https://www.revisor.leg.state.mn.us...176.042&image.x=9&image.y=4&image=Get+Section


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## StihlRockin' (Apr 28, 2008)

Thank you for the replies, advice and suggestions. All good stuff. The idea about getting the proof of insurance from the agent instead of the sub was unusual, but sounds good. I'd of gotten it from the sub, then contact the agent to check it's validity.

Y'all are a bunch of help here. Thanks again.

*Stihl*Rockin'


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## pdqdl (Apr 28, 2008)

I don't pretend to be an expert on all things insurance, but my worker's comp audits our payroll for subcontractors. We get an on-site visit every year. If I hire a subcontractor that does not provide me with a certificate of workers comp insurance (WC), then I bill him at the time of every paycheck for the difference I will have to pay at the end of the year.

Even though (in Missouri) a sub working as a sole employee for himself is not required to have WC, the primary contractor's insurance would be forced to pay insurance benefits if that man were injured on the job. So the WC insurance audits for uninsured sub's.

If your only reason to sub the job is to beat the WC insurance, give it up. They are going to bill you a higher rate on the sub than you would for your own employee. Probably because they don't know his experience mod, etc.

There are a myriad of ways to cheat the insurance companies, but that is a different thread.


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## cjnspecial (Apr 28, 2008)

StihlRockin' said:


> The idea about getting the proof of insurance from the agent instead of the sub was unusual, but sounds good. I'd of gotten it from the sub, then contact the agent to check it's validity.
> *Stihl*Rockin'



Many a businesman have been screwed when the COI is fake or the agent messed up. If you get the COI from the agent, you have recourse if something wasn't correct. Because of the extra layer or safety, getting the cert from the agent is standard practice for most big businesses, government work and big money jobs.


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## lxt (Apr 30, 2008)

Stihlrockin, the best protection is dont Sub, If I have too what I do is "paid refferal" I`ll let the HO know that a different machine/talent is needed & inform them I`ll introduce them to the person/company!!

I let the to be contractor know that I have work & there is a $50.00 fee upon getting the job, Im there when they come(usually finishing my job), so I know if they get it or not!! A couple companies & mine have this pact to help each other & the fee was agreed upon by all of us, if some one jams the other guy he wont get any work!!!

so far this system has worked very well & $50 isnt much & this way all the liability is on them....not you, General contracting is a pain id much rather refer work!! sooner or later some dolt will not pay...but the word of mouth will catch him!!


LXT.........


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## Slvrmple72 (May 1, 2008)

I like the silent partnership. I do the trees, he does the stumps, we clean up the mess together and split the profits accordingly. I showed him mine and he showed me his... Insurance! ( you bunch of deviants! ) Always ere on the side of caution: Subs will not work if they cannot provide proof of insurance that you can independently verify. Gotta cover your a$$, especially if it is a big target like mine


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