Expert: Anne-Marie Moore - 10/26/2009

Question
My husband just started a residential contracting business. Aside from himself he has only 1 employee. The law in the State of Georgia requires Worker's Comp for 3 or more employees. Therefore, my husband is not required to carry Worker's Comp.  His employer is informed of the state law and knows there won't be Worker's Comp when the job starts but is there a legal waiver he should sign stating he is not covered for jobsite accidents?  Is there any other insurance(health coverage or something) that can be obtained to cover this one employee? It's not that we don't want to provide insurance but the rates make it an impossible task for such a small business, there would be no work at all if the jobs were quoted with the cost of worker's comp. The cost of the worker's comp is something like $52/$100.00 and for just 1 employee, it's impossible.
Thank you for your time and attention.

Answer
Hi Sharon,

The rates for Worker's Comp vary greatly from what the state offers to private business.  Acquiring an insurance policy for just 1 employee would be even more expensive.

One option to get the business rolling would be to hire your employee as a sub-contractor.  Without knowing the details of your contracting business, I can't make a legal recommendation on this.  If I were you, I would review your options with an insurance agent and your lawyer for legalities. An insurance agent is willing to meet with you to discuss your needs at no fee.  He/she will be eager to obtain your future business as your company grows.

By hiring your "employee" as a sub-contractor, he/she is responsible for providing the necessary coverage.  

Go to sba.gov to research this further.