Whether you are a Sole Proprietorship or Partnership OR use subcontractors or service providers in these categories, new procedures for issuing certificates of insurance for Sole Proprietors and Partnerships require that certificates now clearly identify who is and who is not covered by a policy in the “Comments” section.  

Policies issued to Sole Proprietors and Partnerships do not provide coverage for the individual sole proprietor or partner(s) unless they elect coverage for themselves.  This can leave a gap in workers’ compensation coverage as shown below:

Sole Proprietor or Partner(s)
ELECTS coverage for self
Sole Prop. & Partner(s) - COVERED
Employees - COVERED

Sole Proprietor or Partner(s)
DO NOT ELECT coverage for self
Sole Prop. & Partner(s) - NOT COVERED
Employees - COVERED

what does this mean to you?

Sole Proprietors & Partner(s) – Make sure you have elected the proper workers’ comp coverage as most companies already expect that you have it in place.

Other Businesses – Do not accept a certificate of insurance unless it lists the coverage status of the sole proprietor or partner(s).  If you hire a sole proprietor or partner, who has not elected coverage, he will revert back to your workers’ compensation policy in an audit.  This will increase your premium, especially if there is a loss; therefore, we recommend that you require “your” subs to have coverage in place to keep your costs down.