§23-2-1d. Prime contractors and subcontractors liability.

(a) The Legislature finds that every prime contractor should be responsible to ensure that any subcontractor with which it directly contracts is either self-insured or maintains workers’ compensation coverage throughout the periods during which the services of a subcontractor are used and, further, if the subcontractor is neither self-insured nor covered, then the prime contractor rather than the Uninsured Employer Fund should be responsible for the payment of statutory benefits. It is also the intent of the Legislature that this section not be used as the basis for expanding the liability of a prime contractor beyond the limited purpose of providing coverage in the limited circumstances and in the manner expressly addressed by this section: Provided, That receipt by the prime contractor of a certificate of coverage from a subcontractor shall be deemed to relieve the prime contractor of responsibility regarding the subcontractor’s workers’ compensation coverage.

(b) If an employee of a subcontractor suffers an injury or disease and, on the date of injury or last exposure, his or her employer did not have workers’ compensation coverage or was not an approved self-insured employer, and the prime contractor did not obtain certification of coverage from the subcontractor, then that employee may file a claim against the prime contractor for which the subcontractor performed services on the date of injury or last exposure, and such claim shall be administered in the same manner as claims filed by injured employees of the prime contractor: Provided, That a subcontractor that subcontracts with another subcontractor shall, with respect to such subcontract, be the prime contractor for the purposes of this section: Provided, however, That the provisions of this subsection do not relieve a subcontractor from any requirements of this chapter, including the duty to maintain coverage on its employees. The subcontractor shall provide proof of continuing coverage to the prime contractor by providing a certificate showing current as well as renewal or replacement coverage during the term of the contract between the prime contractor and the subcontractor. The subcontractor shall provide notice to the prime contractor within two business days of cancellation of expiration of coverage.

(c) Notwithstanding that an injured employee of a subcontractor is eligible for workers’ compensation benefits pursuant to this section from the prime contractor’s carrier or the self-insured prime contractor, whichever is applicable, a subcontractor who has failed to maintain workers’ compensation coverage on its employees:

(1) May not claim the exemption from liability provided by §23-2-6 and §23-2-6a of this code;

(2) May be held liable to an injured employee pursuant to the provisions of §23-2-8 of this code; and

(3) Is the designated employer for the purposes of any “deliberate intention” action brought by the injured worker pursuant to the provisions of §23-4-2 of this code.

(d) If a claim of an injured employee of a subcontractor is accepted or conditionally accepted into the Uninsured Employer Fund, both the prime contractor and subcontractor are jointly and severally liable for any payments made by the fund, and the Insurance Commissioner may seek recovery of the payments, plus administrative costs and attorneys’ fees, from the prime contractor, the subcontractor, or both: Provided, That a prime contractor who is held liable pursuant to this subsection for the payment of benefits to an injured employee of a subcontractor may recover the amount of such payments from the subcontractor, plus reasonable attorneys’ fee and costs: Provided, however, That if a prime contractor has performed due diligence in all matters requiring the verification of a subcontractor’s maintenance of workers’ compensation insurance coverage, then the prime contractor is not liable for any claim made hereunder against the subcontractor.