Worker's Compensation
I have a sole proprietorship, and have been told 4 years ago that I needed Worker's Compensation coverage on my self and my subcontractors. I have personal health insurance, and so do the subcontractors that I have do work.
Now I was reading the rules under filing a claim in case one of my subcontractors got hurt, and it says that subcontractors are not covered, only employees. I have no employees.
So now shouldn't I receive a refund or credit from the OHIOBWC?
I have been paying $4000.00 (min) per year for this workers compensation plus $1000.00 for personal health insurance. It covers anything except dental and eye care.
The only reason I see to have workers compensation is so that if I would get hurt they will pay a percentage of my wage plus medial expenses, and that if I had employees I would be required to have it. But I do not.
Robert John
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No worker's comp insurance on Sub's.
I am not in Ohio but your subcontractors should carry their own worker's comp. You can ask them for proof of insurance when they submit their bids. They should be able to make a simple phone call to their ins. company and have it faxed directly to you.
You should only need worker's comp. on any employees (which you currently don't have) on payroll, not subcontractors.
Your health insurance and general liability insurance should be enough.
Worker's Compensation
My advice is to call the Workers Comp bureau in Ohio and explain the situation: you are a sole proprietor, and believe that under the state regulations you are exempt; you have no employees; your supcontractors are already covered under their own policies (if all of this is the case - but make sure you check first before you call!).
To make sure you do not have to pay for insurance on your subs, get a copy of their workers comp policy (subs can ask their insurance company or the state bureau to provide what you need) along with their W-9 (you DO get W-9s, don't you?) when they first work for you. If you don't have these docs on your current subs, please get them to protect yourself from claims. In many states, if your sub doesn't carry workers comp, you have to, just as if they were employees.
Also be careful that the subs can't under any circumstances be reclassified as employees under IRS code. Paying them as subs and providing a 1099 instead of a W-2 doesn't guarantee that the IRS will agree. If they could be reclassified, you would need to carry workers comp insurance. Talk with a CPA or HR professional about this if you have questions.