What If My Subcontractor Has No Workers’ Comp in Arkansas?
Most contractors assume it is the subcontractor’s problem. Arkansas answers that in a single sentence, and the answer is that it becomes yours.
Short Answer
You become responsible for their injured employee. Ark. Code § 11-9-402 makes the prime contractor liable for workers’ compensation to a subcontractor’s employees when the subcontractor has not secured coverage. You can pursue the subcontractor afterward, and that is a recovery problem rather than a shield.
This is the question we get from contractors more than any other, usually phrased as some version of “surely that is on them.” It is a fair assumption and Arkansas does not share it. The statute is short enough to read in full, which is worth doing, because the order of the sentences is where the exposure lives.
What the Statute Actually Says
The obligation lands on the prime contractor
Ark. Code § 11-9-402(a): where a subcontractor fails to secure compensation required by the chapter, the prime contractor shall be liable for compensation to the employees of the subcontractor — unless there is an intermediate subcontractor who does have workers’ compensation coverage.
Not a fine. Not a penalty for hiring badly. The compensation obligation itself moves up the chain to you.
Then subsection (b), and the order matters:
- A contractor, or its insurance carrier, that becomes liable this way may recover the amount from the subcontractor.
- That claim for recovery constitutes a lien against money due, or to become due, to the subcontractor from you.
- And the recovery claim does not affect the injured employee’s right to recover from the prime contractor or its carrier.
Read those three together and the sequence is unambiguous. The injured worker is paid, by you. Your claim against the subcontractor is a separate matter you may or may not win, against a business that has already demonstrated it was not carrying insurance. The lien against money you still owe them is real and useful, and it is only worth what you still owe. This is general information rather than legal advice.
The Threshold Is Lower Than Contractors Expect
Ark. Code § 11-9-102 defines “employment” to include every employment in which one or more employees are employed by a contractor who subcontracts any part of his or her contract, and every employment in which one or more employees are employed by a subcontractor.
One. Not a handful. The general threshold for employers outside this arrangement is different and higher, which is the source of most of the confusion — a contractor who has heard the general number applies it to a two-person subcontractor and concludes there is nothing to check. Because both the head count and the classification of the people doing the work can be argued about, the Arkansas Workers’ Compensation Commission is where to confirm your own situation rather than a general article.
Classification is the adjacent trap
Whether someone is an independent contractor or an employee is not settled by what the agreement calls them. Arkansas applies a multi-factor test and misclassification puts you back in the same position as an uninsured subcontractor, with the added problem that you did not know you were exposed. It is a legal determination rather than an insurance one, and it is worth a conversation with counsel before it is worth a conversation with us.
The Document That Actually Protects You
A certificate of noncoverage creates a conclusive presumption
This is the part of the statute almost nobody uses, and it is the strongest protection in it. Under § 11-9-402(c), a sole proprietor, or the partners of a partnership, who have not elected coverage and who deliver to the prime contractor a current certification of noncoverage issued by the Workers’ Compensation Commission, are conclusively presumed not to be covered by the chapter and not to be employees of the prime contractor — for the term of that certification and any renewals.
“Conclusively presumed” is unusually strong language. It is not a factor weighed later; it settles the question. And it only exists if the certificate is actually delivered to you and you actually keep it.
Which produces a short, concrete filing discipline. For a subcontractor with employees, you want evidence of their coverage. For a genuine one-person operation that has not elected coverage, you want the certificate of noncoverage. Those are two different documents for two different situations, and collecting the wrong one leaves the gap open.
| Who you are hiring | What to collect | What it does |
|---|---|---|
| Subcontractor with employees | Evidence of their workers’ compensation coverage | Shows the obligation sits with them rather than moving to you |
| Sole proprietor or partnership, no employees, not electing coverage | Current certification of noncoverage from the Commission | Conclusive presumption they are not your employee |
| Multi-tier job | The same, down the tiers you can see | An intermediate subcontractor with coverage changes where liability lands |
| Anyone whose status is unclear | Advice, before the work starts | Classification is decided on the facts, not on the contract’s label |
Why a Certificate of Insurance Is a Start and Not an End
A certificate of insurance shows that coverage was in force at the moment it was issued. It does not tell you the policy is still in force on the day somebody gets hurt, and policies do get canceled mid-term, most often for non-payment. A certificate collected at the start of a six-month job is a photograph of a situation that has had six months to change.
So the discipline is collect, check the dates, and re-collect at renewal — and treat a subcontractor who is slow to produce one as telling you something. Our post on certificates of insurance covers what the document does and does not prove in more detail.
Before the Next Job Starts
- Decide which document each subcontractor owes you. Evidence of coverage, or a certificate of noncoverage. They are not interchangeable.
- Put it in the subcontract. Producing the document before work begins, and again at any policy renewal during the job, is a contract term rather than a favor.
- Diary the expiry dates. The certificate that mattered is the one in force on the day of the injury.
- Look down the tiers. An intermediate subcontractor with coverage changes where the obligation lands, which means the party you signed with is not the whole picture.
- Get classification settled early. Before the work starts, and with counsel where it is genuinely unclear.
- Tell us what your subs actually do. Uninsured subcontractor exposure shows up in your own audit as well as in a claim, and it is better to price it accurately than to be surprised at audit.
Ask Cribby about your job setup
Contractor questions tend to be specific, and these are the ones worth asking before the work starts:
Frequently Asked Questions
What happens if my subcontractor has no workers’ comp in Arkansas?
You become liable for it. Ark. Code section 11-9-402 provides that where a subcontractor fails to secure compensation required by the chapter, the prime contractor is liable for compensation to the employees of that subcontractor, unless there is an intermediate subcontractor who does have coverage. It is not a penalty and it is not discretionary; it is where the obligation lands. This is general information rather than legal advice.
Can I get the money back from the subcontractor?
You can pursue it, which is not the same as getting it. The same section allows a contractor or its insurance carrier that becomes liable to recover the amount from the subcontractor, and that claim constitutes a lien against money due or to become due to the subcontractor from you. Note the order of events though: the statute also provides that your recovery claim does not affect the injured employee’s right to recover from you. The employee is paid first, by you, and your recourse is a separate fight.
How many employees before a subcontractor needs coverage?
In this corner of the work, one. Ark. Code section 11-9-102 defines employment to include every employment in which one or more employees are employed by a contractor who subcontracts any part of his or her contract, and every employment in which one or more employees are employed by a subcontractor. The general threshold for other employers is different and higher. Because the count and the classification both matter, the Arkansas Workers’ Compensation Commission is the place to confirm your own situation.
What is a certificate of noncoverage?
It is the document that protects you when you hire a sole proprietor or a partnership with no employees. Under Ark. Code section 11-9-402, a sole proprietor or the partners of a partnership who have not elected coverage and who deliver to the prime contractor a current certification of noncoverage issued by the Workers’ Compensation Commission are conclusively presumed not to be covered and not to be employees of the prime contractor, for the term of the certification and any renewals. A conclusive presumption is a strong protection, and it only exists if you actually collect the certificate.
Is a certificate of insurance from the sub enough on its own?
It is the right starting point and it is a snapshot rather than a guarantee. A certificate shows coverage was in force when it was issued; it does not tell you the policy is still in force on the day of an injury, and policies do get canceled mid-term for non-payment. Collect certificates, check the dates, and re-collect at renewal. Our post on certificates of insurance goes through what the document does and does not do.
Does an intermediate contractor change anything?
Yes, and it is written into the statute. Section 11-9-402 makes the prime contractor liable unless there is an intermediate subcontractor who has workers’ compensation coverage. On a job with several tiers, that matters to who ends up carrying the obligation, and it is a reason to understand the tiers below you rather than only the party you signed with.
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Disclaimer: This article is general information and is not insurance, legal, tax or financial advice, and it is not a substitute for the terms of your own agreements or policies. References to Ark. Code § 11-9-102 and § 11-9-402 are provided as general information about publicly available law and are not legal advice or an opinion about any particular business, contract, job or claim. Whether any person is an employee, an independent contractor, a subcontractor or a prime contractor, whether coverage is required in a given case, and how liability would be allocated on a particular job are questions determined by the Arkansas Workers’ Compensation Commission and the courts on the facts, and should be taken to a licensed attorney. This article does not state the general employee-count threshold at which coverage becomes required; confirm your own position with the Commission. Cribb Insurance Group Inc does not adjust claims and does not determine coverage. Coverage is set by the insurance company and is subject to the terms, conditions and exclusions of the policy actually issued to you, which controls in every case. Cribb Insurance Group Inc is an independent insurance agency licensed in Arkansas, Oklahoma, Missouri and Texas. Reviewed 2026-08-16; law and carrier filings change, and this article may not describe the current position after that date. Cribb Insurance Group Inc, 1601 SW Regional Airport Blvd, Bentonville, AR 72713 · (479) 286-1066 · service@cribbinsurance.com.