What Is Subcontractor Insurance?

Subcontractor Insurance

Most businesses know they need to carry general liability insurance. Unfortunately, many don’t realize that a standard policy can exclude a good number of situations you might find yourself in. Take hiring subcontractors, for example. If a subcontractor performs work that results in an injury on your property, your insurance may not cover damages resulting from any claims. Research shows that subcontractor insurance can help minimize that liability.

Understand How Subcontractors Affect Business Liability

Once you enter into a contractor/subcontractor relationship, you are expanding your liability. You could be held liable for any inferior work performed on your behalf by the other party. Screening subcontractors and requiring specific insurance coverage helps mitigate that risk.

Take Steps To Protect Your Business Interests

It is your responsibility as a business owner to ensure that any subcontractors have sufficient insurance before they perform any work for you. As a general rule, you’ll want them to have general and professional liability and errors and omissions coverages in place. If you would like additional protection against any damages caused as a result of a subcontractor, purchasing an umbrella policy may be helpful.

Don’t let a lack of coverage on someone else’s part lead to financial ruin for your company. Ask about exclusions to your existing policies for work done by subcontractors and secure appropriate coverage to fill any gaps.