Worker's Comp. "if any policy"

4 Replies

Hello Everybody,

I would like to get some feedback from other landlords and how they handle Worker's Comp. with subs to mitigate risk.

Let me explain my situation. I sub-out all contractor related work, lawn care, painting, roofing etc - I have zero employees.

All subcontractors provide me with a certificate of liability. Because most are owner operated they only have general liability coverage. Not workers comp. Because they don't have Worker's Comp. my "if any" policy covers them. After a recent audit I learned I am responsible to pay for their workers comp.

What is the likelihood of getting sued and the subcontractor winning without workers comp?

If I have an agreement with the subcontractor clearly defining their responsibility to cover Worker's Comp. will that take me off the hook?

Am I getting too carried away with insurance? If I lost in a lawsuit could they get your personal items or just what's in the LLC?

Of course the insurance guys are going to advise this extra coverage. But I really don't think a lot of landlords have this because 8 out of 10 subcontractors I work with don't have Worker's Comp.

Does anyone else have the same concerns that I do?

Thank you for your response!

The person taking your stuff will not be the contractor, it will be the goons (attorneys, sheriffs, etc.) of the State of Illinois Work Comp Board.

You cannot have them waive workers comp with a contract only the state can waive workers comp. IL has a waiver though. What you should do is maintain your "if any" or ghost policy and require every subcontractor to provide you with a state waiver or cert showing workers comp. Anything less is literally criminal.

The real question is why didn't your agent or insurer advise you of this prior to audit?

Thanks Derek. I was not aware of the workers comp waiver for Illinois. I found that one contractor I hired gave me a certificate of insurance that had lapsed.

I just want to make sure I don't get sued and lose everything.

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if any or ghost policy are work comp policies which will cover if there are any employees of the business, but assume there will be none. They are used by companies that are required to carry work comp (almost all companies in IL) but only use insured subcontractors. Usually run $700-$2000 depending on state law. 

Audits are performed annually by the insurer.