In many states, small business owners and family members don’t need to carry workers’ compensation coverage for themselves. Even if not required by the state, it’s common for general contractors to require all subcontractors to purchase coverage.
As an employer, you can’t legally ask job candidates whether they’ve had past workers’ compensation claims. It’s prohibited by the Americans with Disabilities Act and state anti-discrimination laws.
Knowing what type of coverage your subcontractors carry, and whether your state classifies them as independent contractors can help you avoid surprises during your annual premium audit.
Don’t be surprised (or overcome with dread) when you hear your policy requires a workers compensation audit. Every workers’ compensation policy must be audited annually at the end of the policy period to make sure you are charged the correct amount for your policy premium.