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WC Insurance is strongly recommended. Coverage for an organisation that does not employ anyone is nominal – less than $100 pa from memory.
The problem is that you can employ people and not know it! If you engage a contractor, and that contractor is not self-employed, and if the managing agent fails to get a subcontractor’s statement from the contractor, or if the managing agent gets the subbies statement but doesn’t check it properly (most of them don’t know what to look for) then you could find that the contractor has a claim against you. You could even be liable for a contractor engaged by an owner that the OC didn’t know about, for instance in an emergency.
The definition of who is or isn’t an employee is complex, and could include volunteer workers.
You will not be refused WC insurance. Claims history can be used to calculate your premium, but is very unlikely to apply in this case. It cannot be used to refuse insurance. For the small cost involved it is an essential protection.
If your managing agent is making these sorts of comments then you have an additional problem of ensuring that they are managing subcontractors properly and that they are keeping adequate records. For instance, the subbies’ statements I referred to above – these are essential for proving that the subby was not an employee.
You need to confirm that the Managing Agent is obtaining these statements in all cases, that they are up to date, and that they are properly checked. For instance, many subcontractors answer the question about having their own WC insurance by quoting a personal accident insurance policy – this is not the same, and in the event of an accident they will not be considered as covered, meaning that the responsibility might fall on the OC.
Also, many subcontractors don’t actually know whether they are sole traders or employees! You do not have to validate the information provided, but it is essential to check that the form makes sense. Your managing agent must be familiar with the rules and must have procedures in place to ensure that you do not get hit with a claim.