Contractor Liability Concerns With Contracted Labor

As a contractor, you have areas of expertise that help secure new projects or building jobs. However, when the workload gets overwhelming or an area of the project requires a bit more experience than you have, bringing in additional labor through subcontractors can be a real boost to your bottom line. Unfortunately, if a claim arises out of work that one of your subcontractors did, you might find that you actually assumed a huge financial risk.

Denied Coverage

The information found at reveals that much general liability or business owner’s policies exclude independent contract work from claims processing and coverage. Your company would then be liable for the cost of resolving the situation out of pocket, even though the subcontractor was at fault for the incident. This is why it is important to check the subcontractor liability insurance coverage for your own policies, but also require those you work with to carry their own policies as well.

Supplemental Coverage Areas

In addition to the general liabilities related to damaged property, you should also request that any independent contractor your work with also carry coverage in the following areas.

  • Workers compensation
  • Errors and Omissions (professional liability)

If your subcontractors are unable or unwilling to provide their own insurance coverage, there is also the option of adding them to your own coverage. Check with your broker about adding additional insureds to your policy.