By Alicia M. Phidd, Esq.
South Florida- If you are operating a business in accordance with the law, you will have insurance for everything from general liability to keyman insurance. Some small business owners will obtain general liability insurance and through no fault of their own, believe that insurance will cover all risks.
Consider this set of facts. A car dealership hires a detailing company to prepare vehicles for sale and delivery. The detailing company contracted to wash and provide detailing services. On the car dealership’s premises apparently there was a hole in a concrete patio and then said hole eventually had dirty standing water which obscured the view of the hole. An employee of the detailing company hurt himself when he stepped into the hole. Who do you think should be responsible for his injuries? Do you think your general liability insurance will cover the risks?
It will not! This is a worker’s compensation matter. An employee was injured while working. In Florida, worker’s compensation protects the employee from retaliation by the employer such as being fired because he was injured. The law ensures that the business will provide the injured worker with the necessary medical benefits and or disability benefits resulting from the injury. It further facilitates the worker’s return to work as long as it is not at an unreasonable cost to the business.
The answer to the scenario above is that they are technically both responsible because the detailing company happens to be a subcontractor of the car dealership. The car dealership is considered a statutory employer because although they are not the direct employer, they borrowed the employee of a subcontractor. However, if the subcontractor has worker’s compensation insurance that covered the expenses and all that the injured party needed, the car dealership would not be responsible above and beyond the amount of the benefit for the work related injuries. The employee after getting all the benefits he could get from his direct employer, the detailing company, actually sued the car dealership to obtain more monies. In George W. Felder v King Motor Company of South Florida d/b/a King Hyundai __So. 3d___, Case No. 4D11-3893(Fla. 4th DCA March 20, 2013), the employee sued the contractor under legal nuances but the Appellate Court said not so fast.
The car dealership is immune from being sued because they were technically his employer and since the subcontractor had worker’s compensation insurance and his medical and disability were paid through the subcontractor’s insurance, the law was satisfied.
The scenario presented here had responsible companies who had their insurances in order. Be aware that if you do not have worker’s compensation insurance, it is against the law and your company or the sole proprietor will be held directly liable. The general liability insurance policy typically will not provide benefits for an employee’s injuries.
Okay, this is where you stop reading and run, not walk, to do an inventory of the insurances you have and if you don’t have worker’s compensation insurance, buy it now!
Worker’s compensation laws are truly about keeping the work environment safe and it assures the employee that they can get medical attention without fear of retribution from the employer.
The information provided in my weekly columns are mere generalities and you should always check with your attorneys. However, the following should assist you in reducing your risks:
I. Purchase worker’s compensation insurance even if you are the only employee. Ensure that it is up to date. Purchase an umbrella policy if you are in a high risk industry such as construction.
II. Require all subcontractors to produce general liability insurance and worker’s compensation insurance to work with your company.
III. Create safety teams with employees as members so they are invested in a safe environment. Institute weekly reporting system/updates.
Alicia M. Phidd, Esq.
Ms. Phidd represents businesses in transactional matters as well as litigates on damages for businesses that ranges from half a million dollars to billions of dollars. She practices business law and complex commercial litigation in Florida. She is currently a co-host on Perspective Talk Show on WAVS 1170AM and appeared on WWBA 820AM and WTMPS 96.1FM to discuss current affairs and legal matters.
She holds a B.Sc. in Chemistry, a Masters in Environmental Studies, Graduate Certificate in Solid Waste from SUNY Stony Brook and a Doctor of Jurisprudence from St. Thomas University School of Law.
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