A subcontractor employee was injured at a Flextronics facility and sued for negligence. Flextronics tried to use the workers' compensation exclusive remedy defense to block the lawsuit, claiming it wasn't liable because the subcontractor had insurance. The Texas court rejected this defense, ruling that simply requiring a subcontractor to carry insurance isn't enough—the general contractor must actively provide or ensure coverage through mechanisms like an OCIP (Owner Controlled Insurance Program) or specific insurance provisions in the contract. The case was sent back to trial.
Don't assume your insurance requirement language protects you from lawsuits. Courts look at whether you actively managed or provided the coverage, not just whether you required it.
If you're a general contractor, consider using an OCIP or similar program to actively control workers' comp coverage rather than just passing the requirement to subcontractors.