Does My Insurance Cover Subcontractors, or Do They Need Their Own?

Hey guys, Mike here.

Running a contracting business, I can’t do everything myself. Some jobs need extra hands — maybe I bring in a roofer, an electrician, or a painter I trust to get things done. But one thing I learned early on is that subcontractors can get tricky when it comes to insurance.

So I asked my broker straight up: does my policy cover subcontractors, or do they need their own insurance?

Here’s what I found out:

• My general liability policy only covers my business and my direct employees.
  If a subcontractor makes a mistake — like causing property damage or hurting someone — that claim usually doesn’t fall under my policy.

• Subcontractors are supposed to carry their own insurance.
  That means liability insurance, workers’ comp, and sometimes even commercial auto if they drive for the job. Without it, I could be the one left holding the bag if something goes wrong.

• Certificates of insurance are a must.
  Before I let a subcontractor step foot on my job site, I ask for a certificate of insurance. It proves they have active coverage, and I keep it on file just in case a claim ever comes up.

• Some policies require me to list subcontractors as additional insured.
  Depending on the project and my carrier, I may need to formally add them to my policy for that job. My broker explained when this makes sense and when it doesn’t.

• If I don’t verify, the liability shifts to me.
  That’s the scary part. If a sub doesn’t have coverage and something happens, the client could come after me, and my insurance company might deny the claim.

The bottom line? Subcontractors should always carry their own insurance, and it’s my job to make sure they do. It keeps my business safe, protects the client, and keeps the job running smoothly.

If you’re in contracting like me, don’t assume your policy automatically covers your subs. Call your broker and double-check. Trust me — it’s one of those things you don’t want to find out the hard way.

If you want to talk to someone about setting this up right, give The Sarrica Insurance Group a call at 516-277-0812 or fill out our quick online form here: Get a Quote.

— Mike