Workers’ comp disputes can be complicated enough on their own, and the issues only compound when contractors and subcontractors are involved. OH contractors insurance is required for any construction contractor in the state, but where does liability fall during an incident? How do you, as a business owner, manage workers’ comp claims when you have a subcontractor for the project? Here are the fundamentals to consider.
Risk Management for Contractors
An effective way to control costs for workers’ compensation claims is to establish a safety culture on the worksite and among employees. This remains true for businesses that operate primarily as contractors. Safety culture extends past simply having the health and safety standards in place—it’s a commitment among employees and management to collaborate on a safe workspace. Some key aspects of building safety culture include:
- leading by example, with supervisors and a safety committee familiar with safety regulations;
- hiring employees that are familiar with best practices for safety;
- encouraging participation in routine safety training;
- establishing open communication with management to develop employee trust;
- expediting claims with template forms and instruction on swift responses to injury.
Contractors’ Responsibility for Subcontractors
For larger projects where subcontractors need to be hired, contractors must know their responsibilities for the subcontractors’ workers. In the event of a workplace injury or death, it can be unclear where liability falls, and in many cases it might default to the contractor. State legislation can affect the details of when this is true. Still, typically the general contractor becomes liable if it directly controls or dictates the subcontractor’s work or neglected responsibility for managing the worksite’s conditions when the injury occurred. The contract conditions should be made with this in mind, and the general contractor should consider methods of risk management to mitigate liability by performing due diligence.
The general contractor can benefit from consolidating insurance with the subcontractor as part of the initial contract; Simultaneously, this does mandate that the contractor handle compensation. It also ensures that the subcontractor is at least partially responsible. This also prevents situations where the subcontractor neglects to provide coverage, and the contractor becomes assigned as the statutory employer, thus inheriting responsibility for the claim in full.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.