Background:  Many dealerships use a subcontractor on premises to wash automobiles and for other operations.  Current law regulates the terms and conditions of employment and establishes specified obligations of employer and employees.  Dealers can control the liability by having the subcontractor work under a written contract that indemnifies the dealership and also, provide the dealership with General Liability (GL) & Auto Insurance (dealer as additional insured) and Workers’ Compensation (WC) Insurance (with waiver of subrogation and dual employer endorsement).  Dealers must maintain arm’s length distance with contractor operations so as to avoid active supervision.  Also, liability accrues when the equipment provided by the dealership to the subcontractor, such as forklift or a ladder, is involved in an accident resulting in an injury to the contractor employee.

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