{
  "url": "https://scopeofcover.com/explainers/nc/uninsured-subcontractor-liability",
  "title": "North Carolina Workers' Comp Liability for Subcontractors",
  "template": "explainer",
  "published": "2026-10-06",
  "updated": "2026-10-06",
  "last_verified": "2026-10-06",
  "answer": "If a subcontractor lacks required workers' compensation insurance in North Carolina, the principal or intermediate contractor who hired them can be held liable for their employee's injuries. Scope of Cover found that this liability exists even if the subcontractor has fewer than three employees. When a claim is filed, the North Carolina Industrial Commission establishes the order of payment, beginning with the immediate employer. The upstream contractor can then recover any amount paid from the party originally responsible.",
  "editor": {
    "name": "Eric Dawson",
    "title": "Editor"
  },
  "publisher": "scopeofcover.com",
  "claims": [
    {
      "claim_id": "nc-subcontractor-employee-count-irrelevant",
      "statement": "The liability of a principal contractor, intermediate contractor, or subcontractor for a subcontractor's employees exists irrespective of whether the subcontractor has fewer than three employees.",
      "value": "fewer than three employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "quote": "shall be liable, irrespective of whether such subcontractor has regularly in service fewer than three employees in the same business within this State, to the same extent as such subcontractor would be if he were subject to the provisions of this Article for the payment of compensation and other",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-exemption-from-liability-expired-policy-unaware",
      "statement": "A principal contractor, intermediate contractor, or subcontractor is not liable to an employee of a subcontractor if the policy expired or was canceled prior to the date of injury, provided a certificate was obtained before subletting the contract and the contractor was unaware of the expiration or cancellation.",
      "value": "not be held liable",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "quote": "or (ii) the policy expired or was cancelled prior to the date of injury provided the principal contractor, intermediate contractor, or subcontractor obtained a certificate at any time before subletting such contract to the subcontractor and was unaware of the expiration or cancellation.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-recovery-of-paid-compensation",
      "statement": "Any principal contractor, intermediate contractor, or subcontractor who pays compensation or other benefits under this Article may recover the amount paid from any person, persons, or corporation who would have been liable for the payment independently of this provision.",
      "value": "may recover the amount so paid",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "quote": "contractor, or subcontractor paying compensation or other benefits under this Article, under the foregoing provisions of this section, may recover the amount so paid from any person, persons, or corporation who independently of such provision, would have been liable for the payment thereof.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-claim-filing-parties",
      "statement": "Every claim filed with the Industrial Commission under this section must be instituted against all parties liable for payment.",
      "value": "all parties liable for payment",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "quote": "Every claim filed with the Industrial Commission under this section shall be instituted against all parties liable for payment, and said Commission, in its award, shall fix the order in which said parties shall be exhausted, beginning with the immediate employer.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-order-of-liability",
      "statement": "The Industrial Commission, in its award for claims filed under this section, must fix the order in which liable parties shall be exhausted, starting with the immediate employer.",
      "value": "beginning with the immediate employer",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "quote": "Every claim filed with the Industrial Commission under this section shall be instituted against all parties liable for payment, and said Commission, in its award, shall fix the order in which said parties shall be exhausted, beginning with the immediate employer.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-workers-comp-employment-definition",
      "statement": "The term \"employment\" includes private employments in which three or more employees are regularly employed in the same business or establishment.",
      "value": "three or more employees",
      "unit": "employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "quote": "The term \"employment\" includes employment by the State and all political subdivisions thereof, and all public and quasi-public corporations therein and all private employments in which three or more employees are regularly employed in the same business or establishment",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-radiation-employment-workers-comp",
      "statement": "Employment involving the use or presence of radiation for one or more employees requires workers' compensation coverage.",
      "value": "one or more employees",
      "unit": "employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "quote": "or in which one or more employees are employed in activities which involve the use or presence of radiation",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-workers-comp-agriculture-exemption",
      "statement": "Agriculture is exempt from workers' compensation coverage unless 10 or more full-time nonseasonal agricultural workers are regularly employed.",
      "value": "10 or more full-time nonseasonal agricultural workers",
      "unit": "workers",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "quote": "except agriculture and domestic services, unless 10 or more full-time nonseasonal agricultural workers are regularly employed by the employer",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-workers-comp-sawmill-logging-exemption",
      "statement": "An individual sawmill and logging operator with less than 10 employees, who saws and logs less than 60 days in any six consecutive months and whose principal business is unrelated to sawmilling or logging, is exempt from workers' compensation coverage.",
      "value": "less than 10 employees",
      "unit": "employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "quote": "and an individual sawmill and logging operator with less than 10 employees, who saws and logs less than 60 days in any six consecutive months and whose principal business is unrelated to sawmilling or logging.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-workers-comp-employer-definition",
      "statement": "The term \"employer\" includes the State and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustee of any person.",
      "value": "State and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustee of any person",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "quote": "The term \"employer\" means the State and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustee of any person.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-workers-comp-employee-count-general",
      "statement": "Generally, businesses employing three or more employees on a regular basis are covered by the North Carolina Workers' Compensation Act.",
      "value": "three or more",
      "unit": "employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "In general, all businesses employing three or more employees on a regular basis are covered by the Act.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-corporate-officer-employee-count",
      "statement": "Corporate officers are counted when determining if a corporation has three or more employees for workers' compensation requirements.",
      "value": "counted",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "Corporate officers are counted in determining whether the corporation has three or more employees.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-corporate-officer-exclusion",
      "statement": "Corporate officers may specifically exclude themselves from workers' compensation coverage under a policy.",
      "value": "may specifically exclude themselves",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "However, corporate officers may specifically exclude themselves from coverage under a workers' compensation policy.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-sole-proprietor-partner-llc-election",
      "statement": "Sole proprietors, partners, and members of limited liability companies are not automatically counted as employees but can elect to include themselves under their workers' compensation policy.",
      "value": "not automatically counted as employees, but they may elect to include coverage for themselves",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "Sole proprietors, partners, and members of limited liability companies are not automatically counted as employees, but they may elect to include coverage for themselves under their workers' compensation policy.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-trucking-owner-operator-coverage",
      "statement": "North Carolina law requires workers' compensation coverage for certain trucking owner/operators, even if they are independent contractors.",
      "value": "required by law that workers’ compensation coverage be in place",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "North Carolina law requires that workers’ compensation coverage be in place to cover certain trucking owner/operators, even if the operator is deemed to be an independent contractor.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-trucking-motor-carrier-liability",
      "statement": "If a trucking owner-operator does not have workers' compensation insurance, the motor carrier must provide the coverage.",
      "value": "the motor carrier must provide the workers’ compensation coverage",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "If the owner-operator does not have workers’ compensation insurance coverage, the motor carrier must provide the workers’ compensation coverage.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-trucking-coverage-regardless-employee-count",
      "statement": "Workers' compensation coverage for trucking owner-operators must be in place regardless of whether the principal contractor, intermediate contractor, or subcontractor regularly employs three or more employees.",
      "value": "regardless of whether the principal contractor, intermediate contractor, or subcontractor regularly employs three or more employees",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "The workers’ compensation coverage must be in place regardless of whether the principal contractor, intermediate contractor, or subcontractor regularly employs three or more employees.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-motor-carrier-liability-exception",
      "statement": "A motor carrier employer is not liable for workplace injuries of an independent contractor who is individually licensed by the U.S. Department of Transportation and personally operates the vehicle.",
      "value": "not liable",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "A motor carrier employer is not liable for the workplace injuries suffered by an independent contractor who is: 1) individually licensed by the U.S. Department of Transportation and 2) personally operates the vehicle.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-occupational-accident-insurance-distinction",
      "statement": "Occupational accident insurance is not a lawful substitute for workers' compensation coverage under the North Carolina Workers' Compensation Act.",
      "value": "not a lawful substitute",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "Occupational accident insurance is a separate form of insurance, and it is not a lawful substitute for workers’ compensation coverage under the North Carolina Workers’ Compensation Act.",
      "retrieved": "2026-10-02"
    },
    {
      "claim_id": "nc-industrial-commission-jurisdiction-oai",
      "statement": "The Industrial Commission does not have jurisdiction over disputes concerning coverage under occupational accident insurance policies.",
      "value": "does not have jurisdiction",
      "as_of": "2026-10-02",
      "jurisdiction": "NC",
      "source_url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "quote": "The Industrial Commission does not have jurisdiction over disputes concerning coverage under occupational accident insurance policies.",
      "retrieved": "2026-10-02"
    }
  ],
  "sources": [
    {
      "title": "North Carolina General Statutes section 97-19",
      "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-19.html",
      "publisher": "North Carolina General Assembly",
      "retrieved": "2026-10-02"
    },
    {
      "title": "North Carolina General Statutes section 97-2",
      "url": "https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_97/GS_97-2.html",
      "publisher": "North Carolina General Assembly",
      "retrieved": "2026-10-02"
    },
    {
      "title": "North Carolina Industrial Commission: Employer insurance requirements",
      "url": "https://www.ic.nc.gov/wcinsrqmt.html",
      "publisher": "North Carolina Industrial Commission",
      "retrieved": "2026-10-02"
    }
  ],
  "license": "CC BY 4.0. Attribute to Scope of Cover (https://scopeofcover.com/)."
}