Is That Contractor Really Covered? How to Verify Workers’ Compensation Insurance in Missouri
By Kirk Reisner, AIC — Partner, MBG Insurance
I started my insurance career as a claims adjuster before I ever sold a policy, and I’ll tell you what those years taught me: the worst claims aren’t the big ones. The worst claims are the ones that land on someone who never should have been involved in the first place. A homeowner. A shop owner. A general contractor who took a handshake and a low bid at face value.
That’s exactly what happens when someone hires a business that doesn’t carry workers’ compensation insurance — and in Missouri, it happens more often than you’d think, because our coverage laws leave more room for gaps than most people realize.
Who Is Required to Carry Workers’ Comp in Missouri?
Missouri law does not require every employer to carry workers’ compensation. The general rule: an employer must maintain coverage once it has five or more employees. The big exception is construction — any employer in the construction industry with one or more employees must carry workers’ comp.
Here’s the trap in that rule. A huge share of the people working on Missouri homes and businesses — the two-man remodeling crew, the solo handyman, the landscaper with three seasonal helpers — operate right around those thresholds. Some are legally exempt. Some should have coverage and simply don’t. Either way, if one of their workers gets hurt on your property, the fact that they didn’t have to buy a policy doesn’t make the injury cost disappear. It just means the injured worker — and his attorney — will go looking for another source of recovery. Often, that’s whoever hired the work.
What Happens If an Uninsured Worker Is Hurt on Your Property?
If a covered employer’s worker is injured, workers’ compensation pays the medical bills and lost wages, and comp is generally that worker’s exclusive remedy. Clean and contained.
If there’s no comp policy, there’s no containment. As a homeowner, you can find yourself facing a liability claim on your homeowners policy — or your personal assets — for an injury you had nothing to do with beyond writing a check. As a business owner, an uninsured vendor’s injured worker can put a claim on your general liability policy, drag your business into litigation, and leave a loss on your record that follows you through every renewal for years.
I’ve seen both sides of these files. Verification is a five-minute task. The alternative can be a five-year problem.
General Contractors: The Audit Bill Nobody Expects
If you’re a GC hiring subcontractors in Missouri, there’s a second exposure that shows up long after the job is done: your premium audit.
When you hire a sub who doesn’t carry workers’ compensation, your comp carrier can pick up that sub’s payroll and charge it against your policy — meaning you pay workers’ comp premium on money you paid the uninsured sub, at your classification rates, with zero chance of getting it back. I’ve sat with contractors reviewing audit bills who learned this lesson the expensive way. And the audit charge is the lesser risk — under Missouri’s statutory scheme, an uninsured sub’s injured employee can pursue benefits up the chain to the general contractor.
Collect a certificate of insurance from every sub before work starts. File it. Your auditor will ask for it, and it’s the only thing standing between you and that surprise premium.
How Do I Verify Workers’ Comp Coverage in Missouri?
The Missouri Division of Workers’ Compensation runs a free verification service, and it’s a three-step process — this matters, because Missouri allows qualifying employers to self-insure, so a business can be fully compliant without ever showing up in an insurance policy search.
Start here: Missouri Division of Workers’ Compensation — Are You Covered?
- Search the coverage database to see if the employer has a workers’ comp policy through an insurance carrier.
- Check the self-insured list if nothing comes up — the employer may be authorized by the Division to self-insure.
- Confirm with the carrier. The state itself notes that its records can lag, so for anything significant, contact the listed insurance carrier to confirm the policy is active. The Division can also be reached at 800-775-2667.
No policy and no self-insured authority? That’s your answer — before anyone swings a hammer.
Reading a Certificate of Insurance Like an Adjuster
Beyond workers’ comp, always request a certificate of insurance to confirm general liability and any other coverage the job calls for. Then actually read it. Three things I check on every certificate that crosses my desk:
- Policy dates that are current. Every line of coverage should be in force today and through the expected length of the job.
- A fresh issue date — top right corner. A certificate issued last week tells you the coverage was active last week. A certificate issued fourteen months ago tells you nothing; that policy could have been canceled for non-payment the month after it was printed.
- Your name in the certificate holder box. When your name or business name is on the certificate, it means the contractor’s agent generated it recently, specifically for you. That’s the whole point. A photocopy made out to somebody else’s job is not proof of anything.
A legitimate contractor can get you a current certificate with one phone call to their agent. If that’s somehow a problem, believe what that tells you.
Protect Yourself Before the Work Starts
After 25 years in this business — first adjusting claims, now placing coverage for contractors and business owners across southwest Missouri — my advice hasn’t changed: the cheapest bid on the table is sometimes cheap because insurance isn’t in the price. Verify comp coverage through the state, demand a current certificate, and make coverage a condition of the job.
www.millenniumbrokers.com/workcomp/
And if you’re a Missouri contractor or business owner who wants help setting up a certificate-tracking process — or you’re the one who needs a workers’ comp policy so you can win the jobs that require proof — the team at MBG Insurance works with these questions every day from our Springfield and Oak Grove offices.
Kirk Reisner is a Partner at MBG Insurance in Springfield, Missouri. He holds a B.S. in Insurance and Risk Management from Missouri State University and the Associate in Claims (AIC) designation, and has served Missouri businesses since 2001. Learn more about Kirk at millenniumbrokers.com/kirk-reisner-biography-and-contact-information/.