Your premium is determined by your payroll. The rate is different for each class of employees. Higher hazard classifications such as roofers will have a higher rate per $100 of payroll than a lower hazard clerical employee. But this is not the only concern. What about any 1099 employees or subcontractors you hire?
Subcontractors must be covered by Workers’ Compensation insurance. If your subcontractor does not have coverage, they will be included in your policy and you will be responsible for premium payments and claims filed for that subcontractor. To avoid this, you should obtain a certificate of workers’ compensation insurance from your subcontractor before work is started and annually thereafter. A valid certificate of insurance will ensure the subcontractor has insurance.
Premium Audit
You will be asked to produce all subcontractor certificates of insurance during your premium audit. In order to expedite your premium audit, keep a record of all subcontractor coverage documents you obtain during your policy period.
If during your audit, you cannot produce Workers’ Compensation insurance coverage documents for your subcontractors, your policy premium will be recalculated to include them in your payroll.
