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This sounds more like it is a company policy that your investors have rather than anything to do with the state's law on WC insurance. Even though the state says that you are exempt, the investor is trying to protect himself from those that may have a claim because many times the courts will rule that even an independent or sub-contractor, even if stated and paid as not being an employee, can be considered an employee for tax reasons, garnishments, and worker's compensation claims. It sounds as if the investor is requesting that you provide your own worker's compensation as a safe guard for themselves against personal liability from you and other contractors rather than from the state.
If that is the case, then they can elect to not do business with you unless you provide what they require you to...that is a choice they are free to make as a business decision. (Some courts have ruled that if an individual is controlled by hours or restrictions on a job, meaning the company tells the contractor when to work, how to do the job, etc., then they can be considered an employee rather than an independent or sub-contractor...this also will cost that company severe tax penalties.)
So, really this is up to you and the company, if you refuse to get the insurance as a term of contracting with them, then they can refuse to do business with you.
Yes, I understand that, but I was just wanting to make you aware that some court have ruled that if the person for who the independent contractor works tells then when, where, or how to service their clients, then they can be seen as an employer (and this basically includes everyone as all companies tell an employee and independent contractor how they want the work done, for whom they are working, and when the job is to be done).
But anyway, that is beside the point (was just extra information I was bringing up in case this were to go before a court and to explain the reasoning behind why this investor may be requiring you to provide your own insurance). Still, it sounds as if this is a company policy issue rather than one of what the state requires of you. If you inquire as to why they want you to have this insurance when the state does not require it, you may find one of these reasons being that reason. Filing an objection to this could cause you to lose the contract if the investor is being up front with you and telling you they require this and you decide not to provide it, that can be grounds for termination of any contract to be had.
You are very welcome. I think if you will go to the state's site and read more it will be beneficial as well. You can read more HERE which states:
Who is an employee for workers' compensation purposes?The definition of an employee is quite broad. It includes full-time and part-time workers, adults and minors, and others who have been hired to do certain jobs. The critical test is the degree of control the employer exercises over the worker.The law also recognizes "statutory employees." These are employees who work for a subcontractor who may be working for a business or another contractor. Employers should inquire whether or not a subcontractor working for them has workers' compensation insurance, regardless of the number of employees employed by the subcontractor. If the subcontractor does not, the subcontractor's injured employees would be covered under the employer's workers' compensation insurance.
Can sole proprietors or partners elect to be covered under workers' compensation?Yes. Sole proprietors and partners are considered owners of the business and are not automatically included under workers' compensation insurance. They may elect to be covered if they are active in the business and have duly informed their insurance carrier. When a sole proprietorship or partnership incorporates, all employees are automatically covered, including the owners if they are also employees of the corporation.
Is the owner of a business or the principal contractor on a job liable for workers' compensation benefits to an employee or subcontractor?Yes. If the subcontractor does not carry workers' compensation insurance, then the owner or the principal contractor would be liable just as if the subcontractor's employee was one of their employees.
**There are other questions on that page that may be of help.
In answer to your other question, that form should be sufficient for them but again, like I said previously, it may just be a legality they refuse to work around....it is truly up to the investor.
Good luck & God bless!
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