Hiring individual contractors has its advantages. It lowers a company’s operating costs while still providing the manpower a company needs for occasional projects and/or peak season demands. It enables a company to take on special projects without the need to hire and train a full-time employee.
At the same time, a business owner should be aware of the insurance-related implications of hiring a contractor. California law clearly states that unlicensed contractors who engage in work that requires a license are considered (for insurance purposes) to be employees of the company. This means that these individuals will need workers compensation insurance in order to perform their jobs. Failure to take out this form of commercial insurance could lead to heavy penalties in the event one or more contractors have an accident while on the job.
Thankfully, workers compensation insurance does not have to be expensive. Massive Insurance, an established California-based insurance firm, offers commercial insurance options to suit the needs of small, medium sized and large companies. To find out more, visit the company website or make an appointment with a sales representative.