Workers Compensation in Montrose, CO

Commonly Misunderstood Questions about Workers Compensation Coverage in Colorado

Does a general contractor with no employees who subs out work to independent contractors who provide their own general liability coverage need workers compensation insurance coverage?

It depends, and possibly yes.

In most states, including Colorado, general contractors are required to provide benefits to employees of subcontractors who do not have a workers compensation policy in force at the time of a work place injury. The employees of subcontractors can make a claim against a general contractor’s workers compensation policy. Simply requiring a subcontractor to obtain a general liability policy does not prevent an independent subcontractor’s employees from making a claim against a general contractor.

An independent contractor who does not have a workers compensation coverage policy in force and hires a subcontractor to help complete their work, triggers an exposure for general contractors.

What is the Standard Used for Determining Whether or Not an Independent Contractor is an Employee or Not?

Many seem to confuse the criteria used for determining an independent contractor status. For example, what the IRS deems an independent contractor with the guidelines spelled out by the State of Colorado?

What to look for?
There a number of different criteria required for an individual to be categorized as an independent contractor, consider a few:

1)      Does the individual work exclusively for you? A true independent contractor can work for and with many different companies and is not bound to single general contractor.

2)      How is the independent contractor compensated? Independent contractors set rates for work performed according to their standard of what the going or fair rate of compensation is for the work they perform. Any manipulation of the contract rate can mean that a true independent contractor and general contractor relationship does not exist.

3)      Who determines when the independent contractor will perform the work? This criteria is used to help determine who has control. If an independent contractor cannot come and go as they please from a worksite, an employer/employee relationship may exist.

4)      Who determines the standard of quality for the work performed? A true independent professional takes pride in the work performed and is not closely monitored to determine the quality of the work that is to be performed.

The questions noted above are just the basics. There are at least 15 different areas of criteria that are used by the state of Colorado to determine whether or not an independent contractor status exists between a general contractor and an independent or sub contractor hired by a general contractor.

Is Your Business Protected from an Unexpected Workers Compensation Claim or Injury?

To be sure, contact DC Insurers-Montrose and speak to a knowledgeable insurance professional. We’ll partner with you to ensure your business is prepared for the unexpected.

Unlike most insurance agencies, DC Insurers-Montrose has approximately 14 different workers compensation insurance carriers to shop coverage for your business.

If you need coverage, call or email us today: (970) 901-0062 or Chris@dcinsurers.com, respectively.

You can also find out more information by visiting the State of Colorado Labor and Employment website.