If you`re a subcontractor, some of the types of insurance you might need to protect yourself and your contractor include: Here are the typical subcontractor insurance requirements we see from our customers. (If you want to learn more about contractor coverage, you can read our guide to insuring the contractor.) If you operate a large or complex construction site, the greatest risk is an injury or accident to a subcontractor. General contractors and project proponents not only have a duty to protect their clients from legal disputes. An uncovered claim could have a significant and negative impact on your reputation as a subcontractor and that of the prime contractor. For subcontractors, it is important to have their own insurance coverage to bear the risk of loss associated with their work in the event of a lawsuit. Both general contractors and subcontractors are businesses, which means their reputation is always at stake. Whether a general contractor hires a subcontractor or another subcontractor hires another subcontractor, it can be tempting to hire the cheapest company in town or the one that is immediately available. But it may not be the smartest idea. When starting a new project, contractors should always ensure that all other contractors they work with are approved, reputable and reliable. Yes – You will need to ask to see a CI to make sure the insurance coverage is up to date.
You may also need to give your customer or insurance provider a copy to prove that they are insured. If you outsource at least half a million dollars and do extensive pre-qualifying for subcontractors, subcontractor default insurance may be a better option for you than bond coverage. Most customers (companies or individuals) state that all contractors and their subcontractors must have insurance. This releases the customer from any possible obligation arising from injury, damage or work of inferior quality. If you`re taking out general liability insurance, you`ll need to tailor it exactly to what you need, as these policies usually cover many other things specific to general contractors, but not subcontractors. If your outsourcing company focuses on roofing, then you are a practitioner in one of the most dangerous professions out there. Because working at such heights is part of the job description, roofers regularly run the risk of accidentally falling or dropping their tools and injuring people or damaging property on the ground. And if this happens, the roofing subcontractor should better have roof insurance on hand, because if it is the opposite, all third-party claims for bodily injury or property damage must be paid out of pocket. Although rarer than the terms mentioned above, it is increasingly common to require subcontractors to take responsibility for pollution from contractors.
This policy covers the risk of a pollution incident on a construction site. For example, an allegation of pollution could result from a spill of a material or even a collision of an underground pipe. It is any pollution that results from your operations. Pollution claims are usually large and affect the EPA, which is why general contractors and project owners try to spread the risk among subcontractors. Keep in mind that many contractors are reluctant to hire an uninsured subcontractor, as this means that they take all the risks and responsibility for any liability. This is not recommended. Typically, a client will ask to see proof of insurance coverage for themselves and anyone else you hire for the project. If it is not possible for your subcontractors to have their own insurance, you can add it to your own liability insurance. As a subcontractor, you have a unique set of insurance challenges and requirements that workers in no other industry face. As a general contractor who builds or renovates properties for your clients, you are legally responsible for completing all work for that project. Regardless of the number of subcontractors you contract with to fulfill an order, they are solely responsible to you and to you, making subcontractor insurance an important protection.
In general, subcontractors are not legally obliged to take out insurance, unless the contract with the customer provides for it. However, contractors are still advised to hire only insured subcontractors. Finally, they can be sued for any mistake or mishap caused by a subcontractor. Before starting an assignment, most general contractors will ask subcontractors to provide documentation for three types of insurance coverage, including general liability, workers` compensation, and commercial cars. Subcontractors should also wear other coverages that help minimize their business risks, including: If one of your subcontractors causes harm to a customer`s business or home in any way, you could definitely be held liable. .