Alex Bealer Blacksmith Association

What are the requirements in Georgia for having Workman's Comp? I am a sole proprietor with no employees. Am I required to have WC?

First of all, I am not an attorney and this is not legal advice.

The short answer is no. Here is the long answer:

You may have a client that will not permit you on a job site without Workers Compensation and they do not care if you are not required by law to carry WC. I call this the contractual requirement. Under this circumstance most one person shops end up with a State Assigned Risk Pool policy at the minimum premium of $750.00. WARNING: If you hire subcontractors that do not have Workers Comp then your premium goes up real fast. In some cases uninsured subs can petition the workers comp board for employee status and claim they are entitled to benefits, big trouble if you are uninsured.

The web site for the State Board of Workers Compensation is here: http://sbwc.georgia.gov

Here are some cut and paste from their FAQ's:

Frequently Asked Questions (FAQ) about Workers' Compensation Insurance

FAQ 1.
How many employees must I have in order to be required to provide workers' compensation insurance?
A: If you regularly employ three or more persons in your Georgia business, you are required to provide the benefits.

FAQ 2.
Does this include part-time employees?
A: Yes, as long as they are regular.

FAQ 3.
What do you mean by "regular" part-time employee?
A: A regular part-time employee works regularly on a part-time basis. Such as employees who only work on weekends.

FAQ 4.
If my business is incorporated, am I or my fellow officers considered to be employees of the business?
A: Yes. The corporation is considered to be the employer and all officers are considered to be employees of the business.

FAQ 5.
Can officers waive coverage on themselves?
A: Yes. As many as five officers may waive coverage on themselves. Each such officer must complete and sign a form WC-10 and file it with their insurance carrier.

FAQ 6.
If one or more officers waive coverage, does this exempt them from being counted in the "three or more employees" rule? (See FAQ 1)
A: No. Officer exemptions do not reduce the number of employees of the corporation.

FAQ 7.
What if I am operating my business as a sole proprietorship or partnership?
A: The Georgia Law considers sole proprietors and partners to be employers not employees, just the opposite of corporations. However, they can elect to be covered as an employee by advising their insurance carrier in writing.

FAQ 8.
How can I learn more about the law regarding Workers' Compensation in Georgia?
A: Consider purchasing Georgia Workers' Compensation Laws, Rules and Regulations Annotated. This book can be ordered from Lexis-Nexis. For details, you may call them at 1-800-833-9844.

There is more, go to the web site for a longer look.

Tony

WOW! Thanks for the info.

Question emailed to me:

At one time, it was mentioned that there was the possibility of coverage being extended, or available, to members who demonstrated at other events, not the SERC. At any event that we demonstrate we have liabilities. It has been some time since the last mentioning, and I was wondering if it ever occurred.

My reply:

Lets see if I got it: You as a member of ABBA want to know: If you demonstrate at an event; where is your liability coverage if you hurt someone attending the event? My top of the head answer is this:

ABBA’s policy will apply if you are acting within the scope of a member and performing duties related to the conduct of ABBA’s business. If you demonstrate as a member of ABBA as described above; I would expect the ABBA policy to protect you as conducting volunteer operations for/on behalf of ABBA. When I worked at SBA as a volunteer for ABBA I have coverage for liability from ABBA and SBA's policy. Demonstrators did too, from the SBA's policy including direct defense if promised in writing (contract).

Now you may want to skip ahead to the disclaimer at the bottom. If you want too much information, keep reading.

If someone is hurt and litigates: The Plaintiff's Attorney will go after everyone in sight. The owner of the property, the group sponsoring the event, any affiliated groups (ABANA, OBG, ABBA etc) and the demonstrator. Each of the insurance policies in force for each group should respond to protect, defend (indemnify) the group that is insured by that policy. One of these policies may include coverage for demonstrators, preferably as an additional insured and with an agreement not to recover claims from the demonstrator if the insurance company pays (subrogation waiver). This protection usually requires a written agreement (contract) promising to indemnify the demonstrator. So... when you demonstrate at an event; at the very least you want to be included under that sponsor's insurance by written agreement. This can be difficult to satisfactorily verify and is not as good as having your own policy (and control of your destiny). Do not be comfortable relying on others to protect you. The best thing to do, if you are committed to demonstrating on your own (fairs, craft shows, etc) is to have your own policy. Then also verify the sponsor’s policy and the extent it will (or will not) indemnify you. How best to do that is another subject that I would call: contracts, indemnity agreements and certificates of insurance. This makes their policy first dollar for defense and claim payment and may eliminate a claim on your coverage.

In discussions about this with a sponsoring organization or group a verbal agreement or promise is difficult to enforce or verify and will never change a written agreement (contract). Most times the insurance policy requires a contract in order to trigger coverage. Get it in writing and read the contract.

Assume you are a professional smith with a shop and (hopefully) liability coverage for your premises, operations and products. Easy, look to that policy for coverage. But still ask for the sponsor to provide coverage under their policy for first dollar claim and defense as well as a subrogation waiver. This hopefully will keep the claim out of your policy and the other company asking you to reimburse for the claim they paid. Do not forget that this may require a contract before their coverage will trigger.

Now, lets say you are not paid, this is a hobby and you have a real job not related to blacksmithing: Ask your homeowners insurance company a "very hypothetical, I am just thinking about, what if" type of question: If I do this demonstration and get sued will my homeowners comprehensive personal liability coverage defend me? Is it excluded? Can this be endorsed? Then, ask them to show you the policy language to support the answer, read it, ask questions and understand it. They might not be happy about the exposure but it may be included or endorsable. I would be suspect of a quick answer, ask them to show you the exclusion or coverage form.

This is a general answer/guidelines and may not be completely correct in more specific situations. For a better answer you need to review the actual circumstances (and contract) with less variables. Do not rely on this for a final answer. Be sure to talk with your Agent or Insurance Company about coverage or exclusions.

Additional question:

I attend events and demonstrate. I make things to sell, and do demonstrations at the events for their benefit. As such, I pay for my spot at the events.
I keep people well away and have a fire extinguisher nearby. I also use a propane forge, as the fire marshals have a thing about open fires (coal).
I have no additional coverage at this time, and am relying upon the event’s insurance.
What would be a recommended amount to be insured, and what would it cost?
How would this be affected by out of state events/demonstrations?

The ABANA endorsed program with The Hartford is the best I have seen. They advertise in the Anvils Ring and Hammers Blow. Last time I checked the minimum premium starts at 250 year. Contact www.industrialcoverage.com for coverage. I do not have a company that can beat this specialty program; I will not write this for ABBA members as long as the conflict of interest thing bothers me.

Try for a liability limit of 500,000 or 1,000,000 or as much as you can afford. Property (your tools) coverage is additional and will cost more.

Commercial General Liability usually defines the coverage territory as USA, its territories and possessions. Other states are OK.

Not a final answer, do not rely on this, call your agent, blah, blah ,blah. (smile)

Tony