Construction companies and contractors often use subcontractors to complete portions of the work. The contractor is the leader hired to complete a project, and the employees that are hired to complete or expedite a project are the subcontractors. These are not long-term employees, but employees who are hired for short-term work and have a temporary working relationship throughout the course of the project.
If one of your subcontractors causes damage to your project or the business and they don’t have the proper coverage, you could end up liable.
That said, you may not need to provide liability insurance for your subcontractors, provided they are covered by a different liability policy. Ultimately, you still need to be sure that everyone responsible for your project is properly insured and you’re covered.
In these cases, you can either require all your subcontractors to have their own insurance coverage, or you can add subcontractors to your general liability insurance or contractor’s liability insurance.
For most, the best option is to ensure that any of your subcontractors carry their own liability insurance. This is common practice and should be included in the contract, but you should still check their certificate of liability insurance to be sure that it’s adequate and current.
It’s not always feasible to have subcontractors with their own liability coverage, however. If this happens, you can add them as “additional insured” on your existing policy. With this option, you’re only covering the work they do under your contract, so you won’t be liable if they have damages elsewhere.
In either case, be sure to discuss your insurance requirements with your subcontractor prior to hiring them.