A clearance letter/certificate is possibly one of the most important documents regarding workers’ compensation coverage. The perceived time and effort required to obtain this document often makes this an overlooked process.
Many subcontractors can have workers’ compensation coverage and accounts. This does not mean that their account is in “good standing” and all premiums have been paid. Once a subcontractor or any employees of the subcontractor have been injured, you will be held liable for the injury/illness that has occurred if you did not obtain a clearance prior to work commencement. This document is too important to be considered a hindrance when an employer can be left exposed.
I am seeing that employers realize the importance of this document more and more as this becomes a requirement for bidding on projects or even admission on certain worksites. This is a promising outlook as this indicates that more employers are trying to do the right thing, not just to avoid liability issues.