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Risk Management Q&A


The subcontractor I want to hire is not required by law to have workers' compensation insurance. Why does Risk Management Services recommend that we require it?


Even though the subcontractor is not required by South Carolina law to have workers' compensation coverage, the subcontractor is still uninsured, and the city or town is their statutory employer. If the uninsured subcontractor or one of their employees is injured, the injuries will be covered as if they are an employee of the municipality.

South Carolina law only requires workers' compensation insurance for a business employing four or more employees. Businesses with fewer than four employees or no employees

  1. can still purchase workers' compensation insurance, and
  2. are still liable for work-related injuries.

Small business owners forgo workers' compensation coverage to save money. The business owner may be paying for health insurance for its employees. However, work-related injuries are excluded by health insurance policies.

For more information on best practices for hiring subcontractors, contact Robert Collins, underwriting manager, at or 803.933.1279.