What Insurance Do I Need as a Subcontractor

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. A certificate of insurance is a legal document that proves that you are insured. However, problems often arise because the general contractor or project owner wants specific wording in the certificate of insurance that lists insurance coverage. Some certificate applications may even require a statement of insurance page to further verify exclusions. Subcontractor insurance requires a specialized insurance broker who has experience in meeting the insurance requirements of your employment. Not only can poor management of these endorsements cause you to lose job postings, but it can also prevent you from getting paid once the job is done. This insurance is something that most states have requirements for, regardless of your industry. You will probably also have construction-specific laws that need to be followed. It`s about making sure the high-risk industry you operate in creates a safe workplace. Always buy workers` compensation from an insurance company after reviewing state rules for specific insurance requirements. It`s usually a good idea to get more than you need to reach the bare minimum if something happens that could lead to a lawsuit, but what you choose will greatly affect the cost you pay.

In short, workers` compensation insurance covers the medical expenses you may have on your hand if an employee suffers injuries on the construction site or in the workplace. Then, roof insurance. Completely optional, its coverage is as simple as it looks, it helps cover the other things your current policy covers. It can be used with a lower coverage policy to incur lower insurance costs when executed correctly. The last optional overrun, the builder`s risk coverage, is insurance that covers the loss of tools or other property you may own. This insurance is almost always taken out as short-term coverage, each covering a single job. It is highly recommended and sometimes even required by local codes or companies, but sometimes it is up to the entrepreneur to have it if he wishes. Most, if not all, subcontractors have a vehicle that they use for business, if not a fleet used by the subcontractor`s employees. That`s why commercial auto insurance is a necessity. While your own insurance may cover your truck that you use for pleasure and business, it`s safer and more uplifting to list every truck or vehicle you use for business in your auto insurance policy. If someone else is driving your vehicle, this is the route you should take, more than safe.

This coverage can help with certain things that affect accidents, from damage to vehicles from an accident on the road or on site, to damage caused by a driver employed on the construction site during work, and even the legal fees resulting from managing these accidents. This depends on the type of work the subcontractor will perform and/or the policies required for the project. Typically, the customer tells you what policies everyone should have. Adding an additional insured to a policy allows that person or business to be insured under your existing subcontractor insurance if they are registered in a dispute arising out of your operations or the work you have done. It pays their fees if you involve them in a lawsuit or claim. Unlike people who work for the contractor`s business, subcontractors are not considered employees. In most cases, subcontractors are freelancers who work on short-term projects. The working relationship between a contractor and a subcontractor is often temporary and ends once the project is completed. General contractors and project owners require subcontractors to have this coverage for the same reason you take out insurance: to protect you. Here are the typical insurance requirements of subcontractors that we see from our customers. (If you want to learn more about contractor coverage, you can read our guide to insuring the contractor.) We`ll look at some common insurance options for subcontractors. Next, we`ll explain what each one is, what it covers, and why it`s important.

As a subcontractor, you have a unique set of insurance challenges and requirements that workers in no other industry face. If one of your subcontractors causes harm to a customer`s business or home in any way, you could certainly be held liable. As a subcontractor, you`re probably not required by state laws to have your own business insurance policies. This subcontractor insurance option is important because even if they didn`t want to make a mistake, a customer can still sue. General liability insurance does not always extend to third parties. For this reason, employers do not want to hire subcontractors who do not have general liability insurance. 2. Get your own insurance. That way, if you`re hired and they ask to see your Certificate of Insurance (COI), you`re all set. And it could make the difference between earning the job or not. Require your submarines to have their own insurance coverage.

If you want to go the extra mile, you can also be named as an additional insured person in your liability insurance. The majority of these requests concern the enumeration of additional details, such as.B. additional insurance notes and waivers of subrogation. But sometimes the applicant wants specific wording on the certificate that says you`re insured for things that can`t be insured — like “all roofing work" — or for which you`re not really insured. No subcontractor insurance covers everything and so you need the help of an experienced insurance broker to get an adequate certificate that will satisfy the general contractor. 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. The subcontractor`s general liability insurance covers accidents, injuries and damage for orders on which the subcontractors are working. In most cases, the contractor`s general liability insurance does not cover a subcontractor. 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. While this isn`t exactly insurance for you, it serves more as insurance for the client you`re working with. It protects your customers from liability and misconduct, very useful for small business owners who usually couldn`t take the risk themselves.

This ensures that the project you said you would complete will actually be completed under the specified conditions. For example, if you withdraw from a contract that you said you would sign and had coverage, the policy would cover the costs the client needed to find a new contractor to do your job. Due to the unfortunate prevalence of this type of activity, these contractor-specific obligations are usually, if not always, required for quotes and customers. As with any insurance or legal decision, make sure you get proper legal advice on what you need in your situation. Pollution claims are usually large and affect the EPA, which is why general contractors and project owners try to spread the risk among subcontractors. 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. Whether you`re a subcontractor or a contractor working with subcontractors, it`s important to know what insurance you need. Subcontractor insurance is not a requirement, but a contractor may determine that a subcontractor will carry some coverage. Sometimes employers refuse to hire a subcontractor without the right insurance coverage. If you`re a subcontractor, the types of insurance you might need to protect yourself and your contractor include: If you`re a subcontractor who takes on multiple jobs per month or week, you could have more than 20 additional policyholders listed in your policy by the end of the year. It is not uncommon for you to exhaust your insurance limits and not to use damage compensation from your general contractor or client.

1. Ask to be included in the tenant`s insurance policy as an additional insured. Few people will ask to be insured in addition because they are aware of the risk involved. It can also be risky if they don`t have adequate coverage and something happens. If you want to add a subcontractor to your general liability policy or workers` insurance policy, you will need to talk to your insurance agent. Don`t have an agent yet? Contact us! You will usually ask for a certificate of insurance (proof of insurance) from everyone involved in the project. It is very important for subcontractors to make sure that they carefully read every contract they enter into. .