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Is it legal for Liberty Mutual Insurance to require a company to provide the bank statements of its subcontractors?

During an audit, Liberty Mutual asked that I provide copies of canceled checks for several subcontractors. All of these subcontractors have insurance. Copies of the checks were provided. They are now asking me to provide the bank statements for one of those subcontractors. If I do not provide those statements, they are threatening to bill me for a huge audit adjustment. Keep in mind that the subcontractor has insurance. Is it legal for them to do this? Is it legal for me to ask for a subcontractors bank statements?

Answers

Sharon Binau
Title: Bookkeeper
Company: MHR
(Bookkeeper, MHR) |

I've been a bookkeeper for almost 40-years and have never been asked for our subcontractor bank statements. I would call the State Compensation Insurance Fund and ask their advice.

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