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Lori, All American and Candy Corp we have sale persons that…

Hi Lori my name is***** Nut...
Hi Lori
my name is***** Nut and Candy Corp
we have sale persons that take the orders and merchandise the stores of our customers. they are contractors under agreement. The are not on payroll. They bill us for the job done every two weeks.
Is it obligatory for us to ask them to have
1. Liability Insurance?
2. What about workers Compesation?
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Answered in 54 minutes by:
3/9/2018
Attorney Wendy
Attorney Wendy, Attorney
Category: Business Law
Satisfied Customers: 1,396
Experience: Member at Keefer & Keefer LLC
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Hello Daniel. My name is ***** ***** I have been an attorney for about 20 years. I am preparing a response to your question and should have that to you shortly.

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You are not typically responsible to require another employer to carry workers' compensation coverage as that employer is legally obligated to do so on any of its employees. If these contractors are just individuals, however, they may not have worker's compensation available for them and you are not required to carry it unless they are actual employees. The key issue here is whether they are properly classified as contractors versus employees. There are several factors you evaluate to determine if they are indeed contractors and those factors focus on behavioral (e.g., when and how to do the job versus allowing them to use their own experience and processes) and financial control (e.g., whether you reimburse them for out of pocket expenses), and the relationship (e.g., any contracts between your company and those individuals). If they are essentially left to make their own decisions on who to approach as potential customers, how to pitch the product to customers, what hours to work and where then they are likely contractors (though this is a fuzzy issue). Thus, you would not need to cover them under any workers' compensation, but you could choose to include in your contracts with them that if available to them they are required to obtain such coverage. On the liability insurance, if you do not require they carry any and they do not have any then there is always a chance you and your company's insurance could be looked to to cover any damages sustained by a third party or to the contractor while selling your merchandise. In other words, though it may not be required that you force them to have insurance, it is the prudent legal and business position that you - in your contract with them - require them to have liability insurance and to explore the availability of any workers' compensation insurance to protect them or anyone they may hire to assist them in their work with you.

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Please note: This is for educational and informational purposes only and is not legal advice. No course of action is being proposed and no attorney-client relationship or privilege has been formed as a result of this conversation.

Attorney Wendy
Attorney Wendy, Attorney
Category: Business Law
Satisfied Customers: 1,396
Experience: Member at Keefer & Keefer LLC
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Customer reply replied 5 months ago
thank you for wonderful advise.
in our agreement the paragraph 16 Injuries states:
subcontractor acknowledges obligation to obtain appropriate insurance coverage for the benefit of the subcontractor and subcontractor employee if any. Subcontractor waives any rights to recovery from All american nut and candy corp, for any injuries that subcontractor may sustain while performing services under this agreement and the result of the negligence of subcontractor of subcontractor's employees.
my question is; Are we obligated to force them to get liability insurance or not? What if they do not want to get it?
thanks you are wonderful
Customer reply replied 5 months ago
please read correction :subcontractor OR subcontractor's employees.

You are not required to force them to obtain insurance, but that is a business decision you will want to consider carefully as even with the waiver language above - which should protect you - you can never be certain how a court will interpret such language should a dispute ever arise.

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