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Ladder of Workers Compensation Insurance = Bankrupt Contractors


Ladder Of Workers Compensation  Insurance Warning For Contractors

The Ladder of Workers Compensation insurance can wreak havoc on a Contractor’s policy.

I had originally written on this subject within the last year. As I have recently covered subcontractors, I thought this would be a good time to cover the Ladder of Workers Compensation  Insurance (c) again. This is a term that I invented a few years ago.

Picture of Big Hand Covering Small People ladder of Workers Compensation Insurance Concept
(c) 123rf.com

The Ladder of Workers Comp insurance has to do with the responsibility of lawfully covering all employees with Workers Compensation insurance. The courts have taken the position if a subcontractor does not cover their employee with Workers Comp insurance then the main contractor would be responsible to cover the employee. The courts will “move up the rungs of the ladder” until an insurance policy is found to cover the employee for a given claim.

The Ladder of Insurance applies in all states. I have seen no exceptions to this circumstance. That is why it is beyond important to have current certificates of insurance for each subcontractor that works for your company.

Picture Businessman Climbing Up Workers Compensation Insurance Ladder

Many years ago as an adjuster, I was working for a carrier that covered a certain school system for Workers Comp. I denied a claim where a subcontractor that was working for a school system fell off of a roof and unfortunately incurred fatal injuries. The subcontractor did not have current Workers Compensation coverage, but instead had provided the school system with an out-of-date certificate of insurance. The denial did not stand and the school system had to pay full death benefits. The subcontractor’s insurance carrier would not pay as they rightly denied coverage.

That was my first experience with the Ladder of Insurance. I do not want to be repetitive. The school system very quickly learned a tough lesson on certificates of insurance. They are worth obtaining from all subcontractors.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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