Insurance & LiensQuestion 1539 of 1605
Which best explains why a general contractor requires each subcontractor to carry its OWN workers' compensation insurance?
a.To satisfy the mechanics lien statute
b.So injured employees of the sub are covered by the sub's policy, protecting the GC from those claims and from being deemed the employer
c.To reduce the sub's wages
d.Because the sub cannot be licensed otherwise
Explanation
If a subcontractor lacks workers' compensation coverage, the hiring contractor can be held responsible for the sub's injured employees as a statutory employer. Requiring each sub to carry its own coverage keeps that liability with the sub and its insurer.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)