Most Popular Workers Comp Call or Email We Received in 2017
The Workers Comp call or email we received most in 2017 actually came from Risk Managers or business owners.
The employer works with subcontractors and was concerned that the IRS Form 1099 subcontractors were going to be counted as workers.. The premium auditor had often informed the Risk Manager or business owner that even though the subcontractor had their own policy, they were still going to count them as employees. (Wow, what?)
The employer had provided Certificates of Insurance (certs) for all subcontractors to the premium auditor. Why would the subcontractors then be counted as employees? One of the red flags in this situation is if the premium auditor says all subcontractors are to be counted as employees, not just certain ones.
Why would the premium auditor do this if they have a cert if front of them? The answer is Ghost Policies. A ghost policy comes from a business owner that buys a policy for just themselves and then excepts (removes themselves) as the business owner from the policy. Some states have ruled these policies are fine. Most do not allow them.
We receive at least one call per week or more from a small contractor looking for a ghost policy. We are not agents so we tell them to check with their local agent that has procured policies for them in the past. Experienced workers comp premium auditors can see ghost policies from a mile away.
We recently (since July) had received a number of calls where the premium auditor would not accept any certs. That is not necessarily correct unless all the certs you have are ghost polices. The now-defunct Jim Walter Homes had a way to take care of certs that were unique and were a win-win-win for the insurance carrier, employer, and subcontractor.
An additional recommendation comes from dealing with expired or questionable certs. The article in this link contains a method to combat having expired certs that takes just a few minutes of an employer’s time.
If you want to know who is a subcontractor and who is an employee, the article at this link covers it very well.
My final recommendation is to be aware of the Ladder of Insurance where you may be insuring workers that your company may not even be aware they are your employees.
One wonders what will be the most popular subject for the 2018 Workers Comp call or email.
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