Workers’ Comp Insurance for General Contractors in Georgia

Workers’ comp insurance for general contractors in Georgia is required once a business employs three or more employees or hire subcontractors who do not have coverage of their own. General contractors without employees or with fewer than three workers do not have to get Workers’ Compensation in Georgia. Typically, it is best for general contractors to get Workers’ Compensation from a carrier instead of self-insuring in Georgia. Not getting Workers’ Compensation when required might result in expensive fines and costly employee claims for general contractors.

When Workers’ Comp Insurance for General Contractors in Georgia Is Required

Depending on the number of workers they employ and the policy status of subcontractors they hire, general contractors may need to maintain Workers’ Compensation coverage in Georgia.

The three-employee threshold comes from O.C.G.A. § 34-9-2, the section of the Georgia Workers’ Compensation Act that sets out which employers it applies to. Counting is the part contractors get wrong. Part-time and seasonal workers count alongside full-time crews, and so do corporate officers unless they have filed to be excluded. A contractor who believes he has two employees because two of his three people are part-time is usually already required to carry a policy.

Coverage is administered through the State Board of Workers’ Compensation. Corporate officers and LLC members are counted toward the three, but under O.C.G.A. § 34-9-2.1, the separate section that carries the exemption and its five-person cap, up to five of them may waive coverage by filing Form WC-10, Rev. 7/2023, which does not require notarization. The form goes to your current carrier, or to the State Board itself if a three-to-five officer business has no other employees and no carrier.

Some general contractors are 1099 employees, and others are sole proprietors. Others still might open an LLC when starting out as general contractors. Typically, general contractors who work alone and do not have employees are not required to have Workers’ Compensation coverage in Georgia. Those with employees might need coverage.

To learn more about coverage for general contractors, speak with the Georgia Workers’ Compensation insurance brokers at NPN Brokers today by calling (561) 990-3022. You can also read more about coverage across the state on our Georgia Workers’ Compensation page.

General Contractors without Employees

Any general contractor working alone does not need to get Workers’ Compensation in Georgia. This is because Georgia requires any business with three or more employees to have coverage. You will not have to get a policy if you work for yourself in a sole proprietorship or as a 1099 employee. Even if you are not mandated to have coverage because you work alone, our Workers’ Compensation insurance brokers can help you find a policy that will provide you with benefits if you are injured at work. Getting insurance as a general contractor is often beneficial, as doing so can protect you from financial liability for your injuries if you are hurt on the job in Georgia.

There is a second reason solo contractors buy a policy they are not required to carry. General contractors and owners routinely refuse to let an uninsured sub on site, because an uninsured sub becomes their problem at audit. A policy you do not need under the statute is often the policy that gets you the work.

General Contractors with Employees

In some cases, general contractors with employees will need Workers’ Compensation in Georgia. Georgia requires any business with three or more workers to get coverage. If you only employ two workers as a general contractor, you will not be required to have a policy. Subcontractors are not considered regular employees, meaning your coverage requirements might change. Payroll for Workers’ Compensation considers the number of part-time, full-time, and seasonal workers employed by a general contractor.

Workers’ Comp Liability for General Contractors with Subcontractors in Georgia

General contractors might have employees or hire subcontractors to help with certain aspects of a project. You might have a Workers’ Compensation liability if you take on subcontractors.

Figuring out your Workers’ Compensation requirements can be challenging if you hire subcontractors as a general contractor. In Georgia, a general contractor that needs coverage under the state’s laws for Workers’ Compensation and hires subcontractors may need to get insurance for those subcontractors if they do not have a policy of their own.

This is the statutory employer rule, set out in O.C.G.A. § 34-9-8, and subsection (a) is written more broadly than the version contractors usually repeat. A principal, intermediate, or subcontractor is liable for compensation to any employee injured while in the employ of any of its subcontractors engaged on the subject matter of the contract, to the same extent as the immediate employer. The liability is not conditioned on the sub being uninsured. What subsections (b) and (c) do is send the claim back to the immediate employer where there is one able to pay, and give you recovery against that sub, which is why in practice it is the uninsured sub whose worker ends up on your policy. It is not a penalty and it is not discretionary. It is how the Act makes sure an injured worker has someone to claim against.

Subsection (d) draws the outer line. Section 34-9-8 applies only to injuries occurring on, in, or about the premises on which the principal contractor has undertaken to execute work, or which are otherwise under its control or management. Work a sub performs away from your job site, at his own shop or on someone else’s project, is outside the section, though it does nothing to help you at audit if his certificate is missing.

If you do not do this as a general contractor in Georgia, you might have to cover the damages of a subcontractor injured on the job. You are responsible for ensuring that the subcontractors you hire already have coverage before you take them on. Otherwise, you may be responsible for including them in your Workers’ Compensation policy.

The trade a sub performs matters as much as whether he is insured, because his payroll is rated at his trade’s classification. We cover this further for Georgia subcontractors, roofing contractors, electrical contractors and carpentry companies.

Certificates of Insurance from Your Subcontractors

A certificate of insurance is the document that keeps an uninsured sub’s payroll off your audit. Collect one from every subcontractor before he starts, not after the job is finished, and hold it for the length of the job plus your carrier’s record-retention period.

Read four things on every certificate:

• The named insured. It must be the legal entity you contracted with. A certificate in the owner’s personal name is not proof of coverage for his LLC.
• The policy period. A certificate that expired mid-job covers nothing after expiration, and those are the days your auditor will charge you for.
• The workers’ compensation section. General liability alone is not workers’ compensation. Plenty of certificates show a healthy GL limit and an empty workers’ comp box.
• The exclusions. If the sub’s officers are excluded from his own policy, they are uninsured people on your site, and their payroll can land on yours.

Here is why this becomes money. Your premium is calculated on audited payroll, not on the payroll you estimated at binding. At audit, the carrier asks for certificates for every subcontractor you paid. For any sub whose certificate is missing, expired for part of the term, or shows no workers’ comp coverage, the auditor adds what you paid that sub to your payroll and rates it at the classification for the work he did. On a roofing or structural sub, that addition can exceed your entire original premium. Chasing a certificate before the sub starts costs five minutes. Chasing it eleven months later, from a sub who has moved on, costs you the audit.

Consequences of Not Having Workers’ Comp as a General Contractor in Georgia

General contractors that fail to get the necessary Workers’ Compensation can face certain consequences in Georgia. These include financial penalties from the State Board of Workers’ Compensation as well as liability for employee damages.

Fines from the State

Georgia imposes civil penalties on general contractors who do not maintain Workers’ Compensation when required. The core provision is O.C.G.A. § 34-9-18(c), which sets a civil penalty of not less than $500 and not more than $5,000 per violation for breaching the insurance requirements in §§ 34-9-121 and 34-9-126. Two neighboring subsections catch contractors as well. Under § 34-9-18(a), willfully failing to file a required form or to comply with a Board order draws $100 to $1,000. Under § 34-9-18(b), knowingly making a false or misleading statement to obtain or deny a benefit draws $1,000 to $10,000, which is the subsection that reaches a contractor who tries to interfere with a claim.

The Board can also add the claimant’s attorney’s fees and a 10% increase in the compensation payable to the injured employee. On top of the civil side there is criminal exposure. The State Board states that an employer who refuses or willfully neglects to secure coverage is guilty of a misdemeanor, punishable by a fine of not less than $1,000 and not more than $10,000, or imprisonment for up to 12 months, or both, so jail time for willful non-compliance is not a rhetorical threat.

Financial Liability for Injuries

One of the most significant consequences of failing to have Workers’ Compensation in Georgia is the potential for financial liability. General contractors with employees and without Workers’ Compensation might have to provide employees with equitable benefits after a workplace accident. If a general contractor is liable for their subcontractors, they might see a similar consequence if they fail to have Workers’ Compensation in Georgia. General contractors with coverage are protected from paying such damages to employees and subcontractors in Georgia.

Self-Insuring Workers’ Comp as a General Contractor in Georgia

Georgia allows certain companies to self-insure for Workers’ Compensation coverage. For general contractors, especially those in the construction industry, taking this route may be unwise.

Self-insuring for Workers’ Compensation means that a company does not have to get coverage, even if required to in Georgia. Instead, it is deemed financially stable enough to handle the cost of workplace accidents itself. To self-insure, you must file an application and provide ample evidence of your company’s finances, and the Board sets a security deposit and net-worth requirement that most contracting firms cannot meet.

When you self-insure for Workers’ Compensation, you do not have to pay monthly premiums to an insurance carrier. While that might seem less expensive in the short term, the opposite may be true in the long term. General contractors often work in dangerous industries like construction. Injuries sustained in workplace construction accidents can be severe and expensive. General contractors that choose to self-insure run the risk of covering the damages of injured employees. The alternative is finding an inexpensive Workers’ Compensation coverage policy that handles employee damages after workplace accidents.

Georgia Class Codes That Price Workers’ Comp Insurance for General Contractors

Georgia is an NCCI state, so your policy uses standard NCCI classification codes and not an independent bureau’s numbering. Your governing classification is the code carrying the most payroll, but a general contractor’s policy is almost never one code. Each trade your employees perform is rated separately, and an uninsured subcontractor’s payroll is added at the code for his trade, not yours.

The ranking holds everywhere. The rate does not. Filed loss costs vary by state, carriers apply their own multipliers, and your experience modification sits on top of both.

One caveat on wording. Bureaus phrase some of these classifications differently, 5537 in particular, so read the descriptions above as the work covered and not as official manual phraseology. Code 5645 is also not applicable in Texas, which matters if you run crews across the line.

Two classification points cost Georgia contractors real money. Code 5606 applies only to a supervisor who performs no manual labor at all; a working superintendent who picks up a tool goes back into the trade code. And 8810 will not hold for an office employee who also works on active job sites. Carriers audit both closely, because both move payroll from an expensive code to a cheap one. If you supply labor to other contractors rather than only performing your own work, our page on Georgia staffing company coverage explains how carriers rate placed workers.

Frequently Asked Questions

Do I need workers’ comp in Georgia if I have two employees?

Not under O.C.G.A. § 34-9-2, which applies the Act at three or more employees. Count carefully before relying on that, because part-time and seasonal workers count, and non-excluded corporate officers count. Many contractors who think they have two employees have three.

Do subcontractors count toward the three-employee threshold?

A genuine independent subcontractor is not your employee for the count. But under O.C.G.A. § 34-9-8 an uninsured sub’s injured worker can still claim against you as the statutory employer, and at audit that sub’s payroll is added to your policy. An uninsured sub costs you money whether or not he affects the threshold.

Can I exclude myself as an officer of my construction company in Georgia?

Yes. A corporate officer or LLC member may elect to be excluded using Form WC-10, Rev. 7/2023, which does not require notarization. Filing it takes your payroll out of the premium calculation and takes away your right to benefits if you are hurt. Contractors who work on site should think hard before excluding themselves.

What happens at audit if a subcontractor’s certificate expired mid-job?

The auditor treats the sub as uninsured for the portion of the term the certificate did not cover, and charges you for what you paid him during that window at the class code for his trade. This is the most common and most avoidable source of a large audit bill for a general contractor.

How much does workers’ comp cost a general contractor in Georgia?

Premium is your payroll per $100 multiplied by the rate for each class code, adjusted by your experience modification factor. Two contractors of identical size can pay very different premiums on claims history alone. The table above ranks the trades against each other so you can see where your payroll sits, but the rate itself comes from the carrier’s filed rates for Georgia. Ask us for the current figures for the codes on your policy.

Can NPN Brokers place a Georgia contractor who has been declined or non-renewed?

Yes. Contractors who have been declined or non-renewed, and those with prior claims or a high experience mod, are the risks we work on most. We place multi-state and pay-as-you-go programs and can quote the same day in many cases.

Get Workers’ Comp for General Contractors Today

If an audit bill landed, a certificate lapsed mid-job, or your renewal came back at a number you cannot bid against, do not wait for the next payroll run. Call NPN Brokers at (561) 990-3022 and speak with our Workers’ Compensation insurance brokers, or request a quote online through our quote request form. We place workers’ comp insurance for general contractors in Georgia every week. We can usually bind within 24 hours. No contracts, no audits, no deposits.

Tell us your trade split, your payroll by code, and whether you use subcontractors. If you have been declined, non-renewed, or hit with an unexpected audit bill, say so up front. Those are the files we work on most, and knowing about them at the outset is what lets us approach the right carrier first.