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No workers' compensation insurance can lead to legal woes for homeowners

March 28, 2012|by Jay Scherder, KY3 News | jscherder@ky3.com

SPRINGFIELD, Mo -- Workers' compensation insurance is designed to protect businesses and employees. It can protect homeowners as well.

There are more than 100,000 workplace injuries in Missouri every year. You never know when or how it will happen. But you can be sure it will go from bad to worse if the employer doesn't have workers' compensation insurance.

"I think it is the responsible thing to do. It's the right thing to do. It's state law that requires that we do it," said Rusty Maclachlan, owner of J. Russell Maclachlan Custom Homes.

Workers' Compensation Insurance is something required for membership in the Home Builder's Association of Greater Springfield, but what about the non members?

"The misconception is everyone has insurance. That's just not the truth in the area," said The Bailey Company owner Matt Bailey.

In some cases it's deliberate. In other cases it's accidental.

"It's not that the contractor is blatantly disregarding the law; it's that they don't understand the law," said Bailey.

In the construction industry, you must carry workers' compensation insurance if you have one or more employees. "So if you sub-contract one thing on a house, you have an employee. They don't have to be a W-2 employee," Bailey said.

It can also include any volunteers or family members who work on the project.

The law isn't just about protecting the business and its employees; it's about protecting the homeowner.

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So what happens to you as a homeowner if your builder doesn't have workman's compensation insurance? If somebody gets hurt on the job, they can take you to court. Furthermore, the progress on your house can slow down and in some cases it can halt altogether.

"[Employees] thought they were covered if they have an accident and they're not. It's up to them to pay their own bills or they would have to sue the contractor or homeowner," explained Bailey. 

"I see no reason why anyone would operate without worker's compensation insurance. If they do they are in violation of the law and they are risking their entire career," said Maclachlan.

So how do you know if a business has workers' compensation insurance or not? The Missouri Department of Labor has an active database to find out.

If you are not able to find the information, it does not necessarily mean that coverage does not exist. For additional help with verifying workers' compensation coverage in Missouri, call 800-775-2667.

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