N.C. General Statute 9719 removes the requirement for Workers Compensation coverage for subcontractors
with no employees. Note: The North Carolina Workers Compensation Act required
coverage if the employer regularly employs 3 or more people.

This statute also states the principal contractor is liable for on-the-job injuries of the employees of
the uninsured sub-contractor regardless of the number of employees the sub-contractor has.
Additionally, you could be held liable for the additional premiums of a sub-contractor who has a
workers compensation policy but decides to reject coverage as an officer, member/manager,
partner, or sole proprietor if it is determined that an employer/employee relationship exists.

General liability insurance certificates and/or written agreements are not su!icient as evidence of
independent contractor status.

The N.C. Industrial Commission and/or the insurance carrier will consider the frequency of work,
method of pay, type of work performed, extent of control, who supplied the tools and other factors
when making determinations as to employee/employer relationships or independent contractor
status.

To possibly avoid future billing issues, you should obtain workers compensation certificates from
every sub-contractor. If a sub-contractor is not required by law to obtain a workers compensation
policy, you could still be held liable in civil court in some cases. It is best not to allow any subcontractor
on your job site unless you have a certificate of insurance prior to work commencement.