Contractor LLC's in Delaware Beware, Insurance Co's are enforcing Senate Bill 1

I am deviating from my risk management posts to discuss the SB1(Senate Bill 1) work comp law and how insurance companies are starting to enforce the requirments created by the law. If you are an LLC corporation and in the contracting business, you cannot exempt yourself from carrying work comp unless you do the following: 1) sign the appropriate LLC member/officer exclusion form the DCRB provides, and 2) provide a LLC resolution showing the member officers of the LLC. These documents are to be presented at audit time and are also to be given to any entity you are contracting with, such as a general contractor. Insurance company auditors are charging premiums if these two documents (required by SB1) are not present. With Delaware comp rates plummeting, insurance companies are looking for premium. Enforcing the law that was passed two years ago is a way companies can find additional premium, but only if LLC companies do not have their paper work in order. Until next time, know your risk and be careful out there. K

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