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Property & Casualty Insurance/Workers comp and liability ins.


Hi Kristen. I am a general contractor in CA and I am working with a non profit. We are building wheelchair ramps through another non profit for low income individuals. My non profit is a transitional center with live in residents. The idea is that I teach these residents carpentry skills as a vocation for them. The cities we are working in require someone to be licensed and that is me. I don't carry workers comp and though the "center" has liability ins., I do not. I am giving all the proceeds to my non profit. I make nothing as I too was a resident there and I am giving back. How does this all work? I want to help, but don't want to be sued. Can I be in trouble for no workers comp if the guys are not my emplooyes? Help please. Thank you, BD

Good morning Brian;

The short answer is that you need both, Workers Compensation and General Liability insurance in force. I don't know the law in the state of California but my guess is that because you're licensed, you're required to carry both no matter what type of job/project you do. We live in a litigious society. Let's say you and I are friends and I asked you, a licensed contractor, to help me build a ramp in my backyard and you say yes out of the goodness of your heart. While building the ramp, you somehow damage my house, despite our friendship, I'm going to want you to fix it/pay for it and if you don't, I'm probably going to sue you. If we finish the ramp but it collapses when someone's using it and they're seriously injured, you're going to get sued. If I get seriously hurt using a table saw while building the ramp, I'm going to sue you. As a licensed professional, you have a higher burden than John and Joe Smith building something in the backyard. The residents you are teaching, even though you are not paying them, can be considered your "employees" while working for you. The same is true when you use volunteers. That is why you need workers compensation in place as well. The only way to protect yourself without these policies is to have a very strict written agreement in place with all parties stating that they are not employees and not entitled to any benefits, including workers comp, that you are not responsible for any damages, etc... I think it would cost you less to purchase the policies than to hire an attorney to draft the agreement. General Liability premium is usually based on sales, since you don't have any, the premium should be low. Workers Compensation is based on payroll, since you're not paying anyone, the same is true, the premium should be low.
I commend you for giving back and encourage you to continue to do so, more people should. I also want to make sure you're protected so meet with an Independent Agent in your area and get both policies in place.
If you need anything further feel free to email me again! Good luck!


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Kristen Mulcahy, CIC


My specialty is commercial insurance for business owners. I can answer questions regarding liability, property, auto, workers compensation, directors and officers, umbrellas and risk management for all types of businesses. Risk management, or loss control, is taking measures to reduce the chances of a loss in the first place or, helping to prevent a loss from happening again. Insurance can be complicated and confusing and there are no stupid questions! I am President of Western States Loss Control, Inc. and we provide insurance consultations to business owners and surveys/inspections for insurance companies in all states West of the Mississippi.


20+ years of industry experience.

Past President of SCIP Southern Connecticut Insurance Professionals, a chapter of International Association of Insurance Professionals.

Certified Insurance Counselor, 2001.

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