Statutory Employer

If an employer is not insured, the claimant may try to make them to pay their worker’s compensation benefits out of their own funds.  Because of the difficulty of collecting against an uninsured employer,  the injured worker may choose to collect benefits from the person or company that hired their employer to perform the work.  In such a case, the person or company that hired the actual employer becomes the claimant’s “statutory employer.”  (Section 8-41-401(1), C.R.S.).  Because of this statutory rule assigning liability to prime contractors who never hired the injured worker directly, those contractors usually require proof of insurance coverage from all subcontractors involved in a project.