Home Improvement Contractor - Licensed Contractors

Liability Insurance?

My husband has been offered a job but they want him to "contract" the position and carry his own insurance. The health ins. part of this is not our concern yet they also said he would need to get his own Liability Coverage and we are not sure what this intails. My husband is an underground miner, risks are high and so is ins. He would actually be a contractor overseeing the progress/safety of another contractor doing the work. Does anyone know what this company is asking of him and what the ramifications are if someone got injured or worse, killed?

Public Comments

1. The significance of being a contract employee is key. The Company does not want to protect your husband with their own coverage. In the event of loss, the Company will be sued regardless and as an employee your husband would be covered by the Company's insurance and not be held personally liable for a loss. If he is responsible for overseeing a project, he could be held liable for several things including success or failure of the project being completed. If there were defects in the workmanship that resulted in injury or lost time he could be held personally responsible. I would suggest some type of professional liability insurance carrier. Be careful the type of coverage. You would prefer a "per occurrence" policy as opposed to "claims made" coverage. In the event he can not get coverage, I would reconsider taking the position.
2. I would suggest some type of professional liability insurance carrier
3. It appears to me that the company is trying to avoid the responsibility for workers compensation coverage for their workers. If a worker is an "employee" as defined by the state labor laws, the company (employer) will be required to maintain workers compensation insurance for him. Mining operations are among the most hazardous out there and the cost of WC insurance is very, very high. If the company can make your husband assume the status of an independent contractor & not an employee, they avoid the expense of WC insurance. This is a common tactic in many places, especially in the buidling & contracting business. One of the factors that will decide if your husband is an employee or not is if he has established himself as a separate business by having his own liability insurance. That is, I suspect, the main reason why the company is asking him to carry this. You say that the health insurance part of this is not a concern, but what do you have available if your husband would be injured on the job? Most health & accident insurance excludes job related injuries unless you are paying the extraordinarily high premiums for the coverage. I would look very carefully at what you are being offered and what protection you have for an injury in this very hazardous job. Further, Willie J. is quite correct about the significant exposures your husband would face if he was held liable for injuries or damages on the job. I would suspect that liability insurance, both "General" (basic) Liability and Professional Liability would be quite costly. I can't tell you what decision you & your husband should make, but I would caution you to be very careful about what contracts are signed and what financial responsibility is being placed upon you. Be wary of what the company says - it's what's in the written contract that counts. For the record, I would not take a deal like this and if any of my family or friends was considering it, I would advise them to avoid it.
4. I agree with Xeod answer. I think his employer is talking about Workers Compensation.