Did you know that if an Employer has uninsured subcontractors working for them, they pick up their exposure? And if the subcontractor doesn’t have the proper coverage in place, ie Longshore, it is now the Employer's responsibility?
Here are just some of the issues when hiring uninsured subcontractors:
- Under the Longshore Act, the last responsible employer rule still applies. Meaning, if a subcontractor’s injury, months or even years later, is found to be the result of working in the Longshore field, the claim comes back to the Employer even if the subcontractor is no longer working for the Employer.
- No screening is done before the subcontractor is hired.
- The Employer has little to no safety control over these subcontractors.
Hiring uninsured subcontractors can also be an issue with the Work Comp Carrier. This may cause the policy to be canceled as coverage is being extended to people the Carrier never intended to cover. And did you know that if the Employer is currently covered by a Leasing Company, there is NO coverage extended to the uninsured subcontractor as they are not named employees of the Leasing Company? This leaves the Employer wide open if that uninsured subcontractor is hurt.
How can this be handled? When the Employer hires subcontractors, they need to collect, review and verify proper coverage is in place. Review the certificate and confirm that it shows State Act Worker’s Compensation, the Longshore endorsement (or separate Longshore Policy), and Maritime Employers Liability if there is exposure on a vessel in navigation. When the certificates are being checked and verified, make sure that the Carrier providing the Longshore coverage is an approved Longshore Carrier by the DOL. This can easily be verified by visiting the DOL website below:
To sum this all up, remind your Employers to verify that any and all subcontractors hired are properly insured.
Kristina Crady, CMIP