Do Subcontractors Need Their Own Insurance?

In the construction and contracting industries, the question of whether subcontractors need their own insurance is a critical one. Although your exact circumstances, including your location and with whom you do business, can influence the answer, you should generally expect to need at least certain types of insurance.

Why Is Insurance Important?

Subcontractors may reap many benefits from securing appropriate insurance coverage. Consider the following:

• Liability protection—Subcontractors face various risks on the job, including accidents, injuries and property damage. Having their own insurance, such as general liability insurance, can protect them from financial losses if they are held responsible for damages or injuries.

• Compliance with client and partner requirements—Many general contractors and clients require subcontractors to carry their own insurance as part of the contractual agreement. These mandates can financially protect all parties by providing a way for the subcontractor to cover claims arising from their work. Failing to adhere to these obligations could limit prospects and lead to lawsuits.

• Professional credibility—Carrying insurance enhances a subcontractor’s professional credibility. It demonstrates a commitment to responsibility and professionalism, which can be appealing to potential clients and contractors. Insurance coverage can be a deciding factor for clients when choosing between subcontractors.

• Workers’ compensation—If a subcontractor has employees, workers’ compensation insurance can be crucial. This coverage may provide various benefits to employees who are injured on the job, including medical expenses and lost wages. Policies can also cover legal costs if a subcontractor is sued by affected workers.

How to Get Contractors Insurance Near Me

At Leon Insurance and Tax Services, our dedicated team has the knowledge and experience to help subcontractors assess their circumstances and identify coverage needs. Contact us today to learn more about available options and retain ideal policies.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.