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R&R Insurance Blog

Contracts: 10 Key Items Explained

Posted by Julie Liebelt

  1. Crane-Construction-SiteAdditional Insured: A person or organization not automatically included as an insured under a policy, and is added by endorsement to the policy at the request of the first named insured. The person or organization then becomes an insured for a specific project, product or premises.
  2. Primary and Non-contributory: Primary is a term used to determine whose policy is going to pay first; non-contributory is a term used to indicate that the primary policy will not seek contribution from the other policy until the full claim is paid or the policy is exhausted.
  3. Waiver of Subrogation: The insurance carrier has the right to recover its claim payments from those who were responsible for the loss. By endorsing its policy with a waiver of subrogation, the carrier is stopped from pursuing this recovery.
  4. Ongoing Operations: Work or other business activity that is in process and has not yet been completed or abandoned.
  5. Completed Operations: Work of the insured that has been completed under a contract or work order, or has been put to its intended use.
  6. Indemnify: To make compensation to an entity, person or organization for injury, loss or damage; to make the other party “whole”.
  7. Hold Harmless Agreement: A provision in a contract that requires one contracting party to respond to certain legal liabilities of the other party. Typically, hold harmless agreements will be “basic”(or “limited"), “intermediate” or “broad”.
  8. Indemnitor: The party agreeing to indemnify and hold the other party (indemnitee) harmless.
  9. Per-Project Aggregate: Required by many project owners or general contractors, this is a standard endorsement to the general liability policy which allows a contractor to specify the application of a separate general aggregate limit to individual construction projects, subject to the usual maximum limit the policy will pay per policy term.
  10. Alternate Employer Endorsement: Applicable when one employer lends, rents or leases an employee to another employer. This endorsement resembles an additional insured endorsement to the workers compensation policy and is attached to the regular (lending) employer’s policy.


Click here to download a copy of this blog.


R&R Insurance Services is pleased to provide this information to you as a guide. It is intentionally condensed. For a thorough explanation of these and other terms, and if applicable in your situation, please contact your Knowledge Broker.

Topics: Certificates of Insurance, Business Insurance, subcontractor, certificates, contracts

Hiring Subcontractors: Why Certificates are a Must

Posted by Julie Liebelt

Subcontractors-on-the-jobAn uninsured subcontractor can increase your exposure to liability and workers compensation claims, affect your experience modification factor and increase your premium. If the subcontractor does not carry insurance, your policy could respond in the event of a claim. An uninsured subcontractor will be considered to be your employee.


The insurance company’s auditor will ask for both payroll and 1099 records in order to determine final premium. If certificates from subcontractors cannot be produced, the cost of those subcontractors will be included in your audit.


Some tips for a successful certificate management program:

  • Advise subcontractors up front that certificates will be required
  • Ensure that dates on the certificate align with the length of time they will be on the project. If the project goes longer, ask for a renewal of the certificate
  • The certificate must show evidence of both general liability and workers compensation insurance
  • Don’t allow for exceptions, even if the subcontractor claims to be exempt from the workers compensation requirement (sole proprietor, no employees, etc.)
  • Your R&R agent can assist you in setting up specific insurance requirements concerning limits and policy provisions designed to protect you such as:
    • Additional insured status
    • Primary and non-contributory insurance
    • Waiver of subrogation

We urge you to require your subcontractors to be insured and to furnish a certificate of insurance as proof. Click here to download a copy of this blog.


R&R Insurance Services is pleased to provide this information to you as a guide. It is intentionally condensed. For a thorough explanation of these and other terms, and if applicable in your situation, please contact your Knowledge Broker.

Topics: Certificates of Insurance, Business Insurance, certificate of insurance, subcontractor

Is My Subcontractor an Independent Contractor or My Employee?

Posted by Mike Geldreich

SubcontractorUnder the Wisconsin Workers' Compensation Act, there are nine criteria that must be met for a subcontractor to truly be considered an independent contractor for the purpose of workers’ compensation.


Contrary to popular belief, it can be difficult for a subcontractor to meet all nine of these criteria. Unless your subcontractor has their own workers’ compensation policy; you may have an exposure you did not foresee. Potentially, you may have a work comp claim for someone who you do not consider to be your employee.


The criteria are as follows:

1) Does the subcontractor maintain a separate business?

2) Do they have a separate FEIN from the IRS? Or have they filed business or self-employed income tax returns with the IRS for work or services in the previous year?

3) Do they operate under specific contracts? Meaning do they have a contract for services stating what service is to be performed, and for what amount of money?

4) Are they responsible for operating expenses under the contract?

5) Are they responsible for satisfactory completion of the work under the contract?

6) Are they paid per contract, per job, or by commission or competitive bid?

7) Are they subject to profit and loss under the contract?

8) Do they have recurring business liabilities and obligations?

9) Are they in a position to succeed or fail if business expense exceeds income?


As you can see, all of these can be broadly interpreted. There are published court cases that go both ways on whether a business meets the criteria for independent contractor status. These often hinge on one or two small facts about the relationship between the employer and subcontractor.


Keep in my mind that the subcontractor must meet ALL nine of these criteria to be considered an independent contractor for work comp purposes. If they do not meet all of them, courts will generally look somewhere else for coverage for this person. If as a business owner you are directing the work, you may be found to be acting as the employer, and thus be on the hook for a worker’s compensation claim.


The Department of Workforce Development has stated that a person is NOT an independent contractor for workers’ compensation purposes just because they say so, or because the contractor over them says so, or even if other government regulators say so. The Department looks at whether all nine of the criteria mentioned above are met.


The best course of action is to insist that all subcontractors maintain their own workers compensation insurance policy, and ask for proof of that via a certificate of insurance. Contact your knowledge broker for additional information.

Topics: Workers Compensation, Work Comp, Business Insurance, contractors, subcontractor