Recognize when there is a problem.
Determine the extent of your liability. Some states - like Washington (RCW 51.12, et seq) - have statutes which define when and how you will qualify as the statutory employer of your subcontractor's employees. Know when you may have liability, and take steps to limit it during contracting with your subcontractors.
Talk to qualified workers compensation counsel.
Speak to your attorney about whether or not your current contracting situation may cause concern for liability due to (a) subcontractors not paying premiums or (b) flow through liability for injuries to subcontractor employees. Once you determine your exposure, you can better prepare yourself to take the steps necessary to cut off liability before damaging effects arise.
Consider selective contracting.
Take your time to review your subcontractors and their history with regard to workers compensation. Ensure that their statute-sanctioned industrial insurance accounts have been paid, that workers compensation claims have been paid, that workers compensation claims are not present/pending, and that the subcontractor is aware of and knowledgeable about its workers compensation obligations. If you are concerned about a subcontractor - find a new one. If your work is especially difficult or inherently dangerous - seek more qualified subcontractors with history dealing with claims.
Utilize responsible procedures and contract clauses.
A contractor should utilize the contract phase in order to obtain further rights with regard to a subcontractor's Workers Compensation insurance. Clauses should be used which require the following: (1) that subcontractors provide copies of all WC insurance certificates, dated and renewed throughout the project; (2) that subcontractors do not exclude coverage for their owners, directors or officers; (3) that subcontractors provide the contact information for their insurance agent, or insurance provider, so that the contractor can confirm that premiums have been paid; (4) that subcontractors shall indemnify and hold harmless contractor from any and all claims against contractor for injury to subcontractors' employees - regardless of the source of injury; and (5) finally, that the contractor shall be entitled to withhold payment of contract sums until said documentation is provided and confirmed, and otherwise that payment may be back charged to ensure that premiums are paid.
Execute contractual safeguards.
Stay on top of your subcontractors. Take advantage of your contractual rights and manage insurance certificates and industrial accounts. A thorough and well-prepared contractor can ensure that his company's success is well cared-for by taking simple steps to confirm that its subcontractors are being responsible.