Yes, a South Carolina builder can owe workers' comp to a roofing sub's injured worker. S.C. Code §42-1-410 makes a contractor that subcontracts work liable for the compensation it would owe if it had employed the sub's worker directly. Lawyers call this the statutory employer rule.
This post walks through the statute section by section, explains what a builder can do to protect itself, and lists the state tools for checking coverage. It isn't legal advice; for your own contracts, talk to your attorney and your insurance carrier.
What the statute says
The statutory employer sections in Title 42, Chapter 1
| Section | What it does |
|---|---|
| §42-1-400 | An owner whose own trade or business includes the work, and who contracts it out, is liable to the sub's workers as if it employed them. |
| §42-1-410 | A contractor doing work for another, who subcontracts any part of it, is liable to the sub's workers the same way. |
| §42-1-420 | The same liability applies when a sub hires its own sub. |
| §42-1-430 | Compensation is calculated on the worker's earnings under the sub that employs him. |
| §42-1-440 | The principal contractor is entitled to indemnity from the party that would have owed compensation, and may bring that sub into the case. |
| §42-1-450 | The worker may recover from the sub instead of the principal contractor, but can't collect from both. |
| §42-1-415 | Reimbursement from the Uninsured Employers' Fund when the sub represented that it had coverage and the builder collected proof. |
For a builder, §42-1-410 is the core. A builder contracts with a buyer or owner to build a house, then subcontracts the roof. If a roofer is hurt and the roofing sub has no coverage, the claim can move up to the builder.
The small-employer exemption
The workers' comp title doesn't apply to an employer with fewer than four regular employees in the same business in the state. It also excludes one with a total annual payroll under $3,000 in the prior year (§42-1-360(2)).
So a small roofing sub may lawfully have no policy. That doesn't end the builder's question. §42-1-415(A) says that when an employer is uninsured, "regardless of the number of employees that employer has," the higher-tier contractor or its carrier pays benefits in the first instance. Ask your carrier how your policy treats an exempt sub.
How §42-1-415 protects a builder that collects paperwork
§42-1-415 gives a builder a path to be made whole. If the sub represented that it had workers' comp when it was engaged, the builder must still pay first. It can then petition the Commission to move the claim to the Uninsured Employers' Fund and be reimbursed.
- Collect it at engagement. The documentation must be collected "at the time the contractor or subcontractor is engaged to perform work" (§42-1-415(B)).
- Use an accepted form. It must be on "a standard form acceptable to the commission." Ask the Commission's coverage staff which forms they accept.
- Keep it. The documentation is turned over to the Commission when an injured worker files a claim.
- Expect notice of a lapse. A sub that fails to notify you by certified mail within five days of a lapse commits fraud under §42-1-415(C), and its license is revoked for two years.
The section also keeps tort immunity in place for a statutory employer under §§42-1-400 to -450 (§42-1-415(D)).
Check a sub's coverage yourself
The Workers' Compensation Commission's Verify Coverage page looks up coverage by employer and accident date. For help, phone the coverage staff at (803) 737-6203 on weekdays, or e-mail coverage@wcc.sc.gov.
The Commission also offers e-mail notifications of policies cancelled mid-term. It developed the service with the South Carolina Home Builders Association so a general contractor can be alerted when a sub appears to have let its coverage lapse.
Lapses aren't instant. The Commission's coverage cancellation page says an insurer that cancels or doesn't renew a policy files a notice of termination, and the notice is effective 30 days after the rating bureau, NCCI, receives it.
A builder's routine
- Look up the sub's state registration on the RBC lookup and confirm ACTIVE status.
- Get the workers' comp certificate from the sub's agent the day you engage the sub, and run the Verify Coverage search.
- If the sub says it is exempt, get that in writing and ask how its crew is covered.
- Register the sub's policy for mid-term cancellation e-mails.
- Write the lapse-notice duty and the insurance requirements into the subcontract.
- Re-check coverage on long jobs and at policy renewal dates.
We cover the rest of the hiring process in hiring a roofing subcontractor in South Carolina. Builders who want a roof bid from Cola City Roofing can contact us; ask us for our registration number and certificate of insurance, as you would any sub.
