Why Hiring Freelancers without Insurance is Risky

By Thoughts

Many producers hire video freelancers without checking to see if they have proper liability insurance or worker’s compensation.  This can be extremely risky, and here’s why:

Liability Insurance

Imagine that something goes wrong on a shoot, and the crew you hired ends up causing some damage.   If your crew doesn’t have liability insurance or deep pockets, then chances are, the party that suffered damages will be working their way up the “insurance ladder”, and will be coming after you to take care of the damages.  If you don’t have deep pockets or liability insurance, they’ll keep working their way up the ladder and go after your client.

We carry $1 million in general liability insurance, which is designed to mitigate this financial risk to you and your clients.  (This unfortunately only covers damages arising from the actions of our employees and subcontractors, and is not designed to cover the actions of others on set.)

You could be liable if your crew gets injured

If you hire a freelancer who gets injured on the job, you can be liable for their medical expenses, and lost wages!  Our workers’ compensation policy helps shield you from this financial liability.

Many people think that just because they hire a freelancer as a 1099 (subcontractor), they aren’t responsible for workers’ compensation benefits if that person gets hurt on the job.  This is NOT true.  You can still be considered to be the “statutory employer” of a freelancer, and responsible for their workers’ compensation benefits.

We’re not lawyers, and this isn’t meant to be legal advice.  Every situation is different and every state has a slightly different take on the issue of subcontractors.   But we will share some relevant parts of the Employer Guide to Virginia Workers’ Compensation.

Guidelines for Contractors and Subcontractors:
3.  Employees of independent contractors are often eligible for workers' compensation.  The employees of an independent contractor are entitled to workers' compensation benefits... if the employee is considered a "statutory employee," as explained below.
4. "Statutory Employer" - Same Trade or Business:  When a subcontractor contracts to perform work or provide services that are part of the same trade, business, or occupation of the employer contractor, the contract becomes the statutory employer of the employees of the subcontractor.

What does this mean?  This means that if you are in the video production business, you are automatically considered liable for workers’ compensation benefits if one of your subcontractors or their employees is injured. 

5. "Statutory Employer" -- Fulfillment of a Contract:  When a contractor hires a subcontractor to perform work in order to fulfill a contract, then the contractor is the statutory employer of the employees of the subcontractor -- even when the contractor does not normally perform that type of work through his direct employees.

What does that mean?  It means that even if you’re not in the video production business, and you contract a freelancer or production company to do a shoot for you, and someone on crew gets injured, you (as the contractor) are automatically considered liable for workers’ compensation benefits for that employee. 

Hiring a freelancer as a 1099 does NOT relieve you of this liability– only a valid workers’ compensation policy can do that!

Again, we’re not lawyers and we’re not here to offer specific legal advice, as each situation and every state is different.

So, what to do?

1) Make sure that all of your subcontractors and production companies that you hire have workers’ compensation that covers all of their employees AND subcontractors.   Our policy covers all of our employees and subcontractors.

2) Check with your workers’ compensation carrier and see if they can provide coverage to your subcontractors that do not have worker’s compensation.

3) If you require a copy of our certificates of insurance, either for the liability or workers’ compensation, just ask.   We provide a copy of the general certificate with our new client onboarding packet; if you need a certificate specifically made out to your company, that will take a few extra days.

For more information:

Employer Guide to Virginia Workers’ Compensation

Contractor Information Sheet   link added 10/2018

Virginia Worker’s Compensation Website

 Ladder of Insurance

What you are required to do when you hire a subcontractor