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Do Subcontractors Need Insurance?

As a business owner, you are likely well aware of the importance of having insurance. But what about your subcontractors? Are they covered under your contractor's insurance policy? The answer to this question is not always clear-cut, as it depends on a number of factors.


For example, if you are hiring a subcontractor to perform a specific task that is not typically covered by your insurance policy (such as asbestos removal), then you will need to purchase a separate policy for them. A general contractor also needs to require independent contractors that are licensed like the plumbers and electricians to have their own insurance. However, if you are hiring a subcontractor to do work that is typically covered under your policy (such as painting or carpentry), then their work may be automatically covered.


It's always best to check with your insurance provider to see what is and is not covered under your policy. That way, you can make sure you are adequately protected against any potential risks. Subcontractors insurance is one more way you can help safeguard your business. Some of the types of insurance coverages you may want to consider for your subcontractors include:

I. General Liability Insurance

This type of insurance protects against third-party bodily injury and property damage claims. If a subcontractor damages a client's property or injures someone while working on your behalf, this policy can help cover the costs of repairs or medical bills. General liability insurance is an essential part of any risk management strategy. By investing in this type of coverage, you can help to safeguard your business against the potentially devastating effects of an unexpected accident or lawsuit.

II. Professional Liability Insurance

Also known as errors and omissions insurance, this type of policy can help cover the costs of legal defense and settlements if a subcontractor is accused of professional negligence. This type of insurance is important for any business or individual who provides advice, services, or products to others, as it can help to protect them from the financial losses that can be incurred if they are sued. While the cost of professional liability insurance can vary depending on the specific coverage and the business or individual's needs, it is typically much less expensive than the cost of defending against a lawsuit.


III. Workers' Compensation Insurance

If a subcontractor is injured while working on your behalf, this type of insurance can help cover their medical expenses, lost wages, and other costs associated with an injury or illness. Workers' compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill as a result of their job. In some states, it is mandatory for all businesses to have workers' compensation insurance.

IV. Builders Risk Policy

A builders risk policy is a type of insurance that helps to protect against the loss or damage of materials, tools, and equipment during the construction of a new home or other building. This type of policy can help to cover the cost of repairs or replacement in the event that construction is delayed due to weather damage, theft, or other unforeseen events. In addition, a builders risk policy can help to provide peace of mind for both builders and homeowners during the construction process. While most builders are familiar with this type of insurance, many homeowners are not. As a result, it is important to make sure that you are fully protected in the event that something goes wrong during construction. A builders risk policy can help to ensure that your investment is protected and that you can move forward with confidence.


V. Inland Marine Insurance

It is a type of property insurance that covers property in transit. This can include goods that are being shipped by land, air, or water. Inland marine policies can also cover property that is stored off-site, such as in a warehouse. The purpose of this type of insurance is to protect businesses from loss or damage to their property while it is in transit. Inland marine coverage can be purchased as a standalone policy or as an endorsement to a general liability policy. Some common types of items that are insured under an inland marine policy include: equipment, tools, materials, and supplies. Businesses should work with their insurance agent to determine the best way to insure their property.


VI. Business Interruption Insurance

If a subcontractor's work causes your business to lose money, this type of insurance can help cover the lost income. A business interruption insurance policy is designed to protect a business from the financial losses that can occur when operations are disrupted due to a covered event. In order to qualify for coverage, the interruption must be caused by a covered event such as a fire or tornado. Businesses typically purchase this type of insurance to protect against the unexpected loss of income that can occur during a natural disaster or other unforeseen events.


Subcontractor insurance is an important way to protect your business from potential risks. By knowing what types of coverage are available and which ones make sense for your business, you can help ensure that you and your subcontractors are properly protected.


At Robinsons Insurance Agency LLC, we put our clients first by offering them policies you can afford. Learn more about our products and services by calling our agency at (832) 843-2888. You can request a free quote by CLICKING HERE. Any coverage discussed is not guaranteed. Please contact us today to go over your policy to ensure your needs are met! We are here and happy to help.