Does Your Insurance Policy Cover Independent Contractors in Oxnard, CA?

Insurance Policy Cover Independent Contractors

Workers is a very important form of protection for any business. This is especially true organizations that utilize subcontractors to complete specific projects or tasks. Also, businesses that operate within specific industries should have coverage for subcontractors as well.

The bottom line is that a subcontractor should be protected by a business when they do not carry their own insurance. This is also true for companies that utilize contractors Insurance within the city of Oxnard, California. The following material will go into detail about why all businesses should have a basic liability plan to protect themselves from subcontractor related injuries.

Proof of Insurance is Important

When a business hires out a group or one subcontractor to perform some type of job on their premises; they must validate that this worker has some type of personal accident insurance coverage. Subcontracted work is usually prone to physical injuries when it involves certain tasks such as remodeling, building or tearing something down.
Most companies will not hire a subcontractor unless they have valid insurance. However, some companies have been known to intentionally or unintentionally hire uninsured contractors. If a company can save money by hiring an uninsured contractor; they will sometimes take this approach.

This is not wise. Especially, if an organization does not have coverage for uninsured subcontractor workers. If that individual is injured on the job, then a company will be responsible for covering that person’s medical costs, lost wages and/or any other type of financial assistance that they might need.

The bottom line is that a business hired an uninsured worker to complete a task and if they get injured while doing that job; then they will assume the risk. So, a company must validate whether or not a subcontractor has coverage before they start to work. This will keep them out of trouble in the event that a hired worker is injured on the job.

Workers Compensation for Subcontractors

Workers compensation is designed to protect people from injury within the workplace. Normally, most companies that require jobs with physical or manual labor will usually have a policy in place to protect their workers. Also, jobs that are hazardous (electrician) or that pose a high risk of death (police officer) will usually have this type of policy in place as well. Ultimately, any job that poses a high risk of injury to a person will usually have workers compensation coverage to safeguard employees and their organization.

When it comes to independent workers or subcontractors, many worker’s compensation insurance providers will not cover them. The reason being is that independent or subcontracted employees are usually required (by law in most cases) to have their own workplace injury coverage on hand.

This way it will protect them from any injury related problems that might arise. Once again, if a company hires an independent worker without workers compensation coverage then they will responsible for taking care of them if an injury occurs while they are doing a job.

Remember that a subcontractor’s coverage is based on the number of labor hours estimated at the beginning of a year. For example, if a subcontractor is expected to work 1,000 hours within a year then that individual should have a policy on file that covers that 1,000 hours. If not, then a company will have to provide protection for that individual if they exceed those hours and are injured while performing work for that organization. So, it is really important for a business to verify that a subcontractor has insurance and the right amount of coverage for the work that they perform.

Insurance Audits

Insurance companies typically do audits on businesses that are known to use subcontractors. They want to ensure that a business that they are protecting is being responsible for validating a subcontractor’s coverage. Most insurance providers will evaluate a subcontractor’s policy to determine if they have coverage and the amount of coverage that they have in place. This is just an added step of security for insurance companies since they do not want to pay out more money for unnecessary claims.

The bottom line is that a company in Oxnard, California is a medium sized city that has a fairly robust economy that is driven by defense, international trade, agriculture, and manufacturing. Subcontractors are frequently hired for work in these industries.

Companies and organizations within Oxnard should not employ any subcontractor that does not have their own worker’s compensation insurance. That individual should also have the right amount of coverage in place for the hours they work and the type of work that does. A business should only hire a subcontractor after they validate that their coverage is legit and is in order.

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