[LWJ]

Ok. I can talk about this because it is how I make my paycheck.

1) AIG gave an audit to the outfit you lease to.
2) It is perfectly acceptable for the company who writes the workers comp to request that all eligible persons have workers comp. If not, then they will be picked up on audit. This is not something that you can dispute.
3) As contractors who are in fact business owners, you are likely eligible to waive workers comp coverage. This is how it works in Oregon, owners can opt in our opt out. It is a choice to make. In Vermont, I have no idea.
4) If you are eligible to waive wc and have done so, you can tell AIG to stick it where ever you wish.

I do not have Vermont insurance license so this only constitutes anecdotal information.
Good luck. PM me if you want to talk off line.

Larry