The Clearance Letter confirms that a company is in good standing, which means that the company has workers’ compensation coverage, has met all payroll reporting requirements, has paid all premiums to date and has no outstanding balance on account.
If, as the principal contractor, you hire sub-contractors it's important to make sure you obtain a clearance letters from them as proof of WCB coverage. If a contractor does not have WCB coverage, you are responsible for them and are required to pay premiums based on the labour amount of the contract. Any injuries sustained by them on your job site will become part of your injury history with WCB Nova Scotia.
If they have an account, but are not in good standing, you, as the principle contractor, are still liable to pay premiums for them based on the labour amount you've agreed to pay them.
How to obtain a clearance letter