Last time, we covered how a missing endorsement on your certificate of insurance can cost you a bid before you even get to swing a hammer. This time: what happens after you win the job, when your crew mix comes back to bite you.

If you run subs on 1099s to keep overhead down, this one's for you.

The mistake

You hire a crew as independent contractors. No payroll taxes, no workers' comp premium on them, simple. Except:

• Misclassification doesn't transfer risk — it just hides it. If a "1099 sub" shows up daily, uses your equipment, works under your supervision, and has no other clients, most states will look at the substance of the relationship, not the paperwork, when someone gets hurt.

• An uninsured sub's injury becomes your claim. If that crew member doesn't carry their own WC policy and gets hurt on your roof, your GL policy wasn't built for that — and your own WC carrier can end up picking up the tab, then re-rating you for it.

• GCs are catching on. More general contractors are now requiring proof of WC coverage from every tier of sub, not just a COI for GL. Show up without it and you're either turned away or forced to carry the sub's premium cost through a wrap-up program.

Why this hits roofers harder than most trades

Roofing is a high-frequency claims class already. Add a workforce that shifts crew-to-crew, season-to-season, and the odds of an uninsured or misclassified worker getting hurt on your job go up — not down.

A few patterns we see often:

• Owner-operators with no coverage of their own. They call themselves subs, but they don't carry a WC policy, and assume they don't need one because they're "independent."

• Crew leads who sub out their own guys. You think you hired one sub. You actually hired a sub who brought three more people you've never vetted.

• Seasonal ramp-up hiring. Storm season hits, crews scale up fast, and classification gets sloppy under time pressure.

What actually protects you

• Get a certificate of insurance and verify it's active — not just on file from last year. A COI with a lapsed policy is worse than no COI, because it creates a false sense of coverage.

• Confirm WC coverage specifically, not just GL. A sub carrying GL with no WC is still your exposure if someone gets hurt.

• Know your state's rules on exemptions. CA and FL both allow WC exemptions for certain owners/officers under specific conditions — but the rules aren't identical, and getting this wrong doesn't just cost you in a claim, it can trigger a payroll audit adjustment after the fact.

• Don't let "1099" be the whole plan. Classification is a legal and tax question as much as an insurance one — worth a conversation with your CPA or an employment attorney if you're not sure where your crews land. We can tell you what it means for your coverage; we can't tell you how to classify your workers.

The audit conversation nobody enjoys

Most contractors don't think about this until a WC audit reclassifies a chunk of "subcontractor" spend as payroll — and the retroactive premium bill shows up. At that point it's not a hypothetical, it's a check you're writing.

The fix is cheaper before the audit than after it.

Bottom line

A 1099 doesn't waterproof you from workers' comp exposure. If your crew mix has grown or shifted this year, it's worth a second look before storm season, not after a claim.

Want a no-cost review of your current coverage? Contact us.