A.C.A. § 11-9-402 states that where a subcontractor fails to secure compensation, the prime contractor shall be liable for compensation to the employees of the subcontractor unless there is an intermediate subcontractor who has workers’ compensation coverage. Any contractor or the contractor’s insurance carrier who shall become liable for the payment of compensation on account of injury to or death of an employee of his/her subcontractor may recover from the subcontractor the amount of the compensation paid or for which liability is incurred. Moreover, the claim for the recovery shall constitute a lien against any moneys due or to become due to the subcontractor from the prime contractor.
However, a claim for recovery shall not affect the right of the injured employee or the dependents of the deceased employee to recover compensation due from the prime contractor, or his/ her insurance carrier. When a sole proprietorship or partnership fails to elect to cover the sole proprietor or partners, the prime contractor is not liable for injuries sustained by the sole proprietor or partners if the sole proprietor or partners are not employees of the prime contractor. A sole proprietor or the partners of a partnership who do not elect to be covered by the statute and are deemed employees there under shall be conclusively presumed not to be covered by the law or to be employees of the prime contractor during the term of his/her certification or any renewals thereof.