Sub contractors have to obtain their own insurance, unless the insurance company for the prime agrees to pick up the sub contractors as part of the DBA insurance program. The insurance under DBA requires every employer (including contractors and subcontractors) either to secure insurance for the payment of workers' compensation benefits provided under the Act or to be permissibly self-insured. If a subcontractor fails to secure the payment of compensation, the contractor will be liable and will be required to secure the payment of such benefits.
Your contracts or administration department should request a certificate of insurance from the subcontractor or prime. The certificate will list the carrier, expiration date of coverage and policy number. It is important to verify the coverage is in place by contacting the insurance company.
A company who fails to obtain coverage through an insurance carrier or to obtain authorization to be self-insured may face criminal prosecution and be subject to imprisonment and/or fines. If the company is a corporation, the president, secretary and treasurer can be prosecuted individually and may be personally and severally liable.
If your company is not insured, an injured employee can either claim compensation under the Act or sue for damages under general tort law. In such a lawsuit, the employer may not rely on the customary tort defenses that the employee is prevented from recovery by (1) his/her own contribution to the cause of the injury or (2) his/her own negligence or wrong-doing.
Furthermore, your company would be considered contractually non-compliant and could jeopardize performance standing and future contract awards.