Michigan Residential Builders License Practice Test

What should a contractor verify that a subcontractor has before hiring?

1. A valid driver's license

2. A workers' compensation exclusion form

3. A business license

4. A bond certificate

The correct answer is: A workers' compensation exclusion form

Before hiring a subcontractor, a contractor should verify that the subcontractor has a workers' compensation exclusion form. This form is vital as it confirms that the subcontractor is either exempt from workers' compensation insurance or has chosen not to carry it. In Michigan, this requirement helps protect the contractor from liability in the event of workplace injuries. Ensuring compliance with workers' compensation laws is crucial to safeguarding both the contractor and subcontractor from potential legal issues. Without proper insurance, the contractor may be held accountable for injuries incurred by the subcontractor’s workers on the job site, leading to financial and legal consequences. While checking for a valid driver's license, a business license, or a bond certificate may be important for various reasons related to credibility, legality, and financial protection, the most critical element specific to workplace safety and insurance coverage hinges on the verification of the workers' compensation exclusion form.