Outsourcing and contracting can be a minefield, and many companies struggle to understand the rules regarding who is liable for what when dealing with subcontractors. Indeed, one of the worst nightmares for a company is for them to face a claim relating to work that a subcontractor has done for them. Often, the insurer for the company that hired the subcontractor will not pay out. Because of this complication, many companies will not hire a company as a subcontractor unless they have their own insurance. Learn more here about subcontractor public liability insurance.
Requiring subcontractors to be insured is a good idea for numerous reasons. Firstly, if your general liability insurance provider notices that you are using a subcontractor that is not insured, then they may have the right to treat that subcontractor as if they were a part of your company ?” meaning that your premiums could increase. In addition, if one of the employees of your subcontractor is injured at work, and the subcontractor is not covered for that injury, then the liability may fall to you.
If you run a subcontracting company, then it makes sense to take out your own insurance ?” not just because it will make you more attractive for other companies to work with, but also because it will cover you for the numerous things that could go wrong on the job site. Not all of the companies that you work with will be organized or reputable, and if something goes wrong with a job you will be glad to have measures in place to protect yourself. Subcontracting companies often have employees working at a wide range of sites and on jobs of varying scales. While some operations may be run with military precision by foremen that preach OHSA from the moment they walk onto the site, others could be disorganized and unsafe, and as outsiders brought in to do a specific task it is hard for your employees to change the culture of each company.
Having public liability insurance, as well as employer’s liability, professional indemnity and industry-specific policies is not just another expense ?” it should be a core part of doing business, because it could make a huge difference to the future of your company in the event that a customer, employee or member of the public attempts to make a claim relating to a site your contractors are working on.