The Unique Risks and Insurance Needs of Subcontractors

The Unique Risks and Insurance Needs of Subcontractors

When you are a subcontractor, then you work in different industries in the commercial sector and may have more unique needs when it comes to the type of insurance you should have. Today, we will discuss some of the unique risks and insurance needs of subcontractors to help ensure they can continue working while having the protection they need in place. 

General Liability Insurance

General liability insurance is one of the most common commercial insurance types and provides protection when a worker causes property damage while performing their duties on the job. It covers something as simple as damaging a door or wall when bringing supplies or tools in and as much as incorrectly installed equipment that causes failure or damages. 

The more severe errors and mistakes may not even be caught for weeks or even months after the job is done. However, with this type of commercial insurance coverage, these damages may be covered by the general liability insurance policy the subcontractor has in place.

Worker's Compensation Insurance

Many commercial businesses have some kind of worker's compensation insurance in place for their employees, and that also includes subcontractors as well. Injuries are common in the construction industry, for example, and this kind of insurance is required by law. It is also required to cover a general contractor that may just be overseeing a job. The subcontractor should not perform any work without this type of insurance policy in place because the general contractor will have to pay for any injuries out of pocket.

Property Floater

Also known as Inland Marine Insurance, this coverage covers business property that doesn't remain in just one location. For example, if you have expensive tools or equipment as a subcontractor that you have to transport to each job in a vehicle, then property floater insurance is something you want to have. 

It helps in the event that your vehicle is broken into. You will have the insurance coverage in place to help replace anything that was stolen so that you do not have to miss any work because of the missing tools and equipment.

Other Risks Faced By Subcontractors

In addition to the risks outlined above, including the risk of injury and the loss of property, subcontractors may also face contract and legal risks regarding indemnity, payment and site conditions, disputes, and more.

To help mitigate these and other risks, it is imperative that you require strong safety practices on the job and educate yourself on the minimum insurance requirements you should have as a subcontractor.

When following best practices, be sure to adhere to OSHA's safety standards and practices, or you can face a shutdown jobsite or injury. Detailed safety plans should be in place, and these plans should be enforced.

In addition to general liability insurance, automobile liability insurance, and worker's compensation, subcontractors should also consider the advantages of having an umbrella insurance policy and possibly a professional liability policy in place as well.

For more information on these and other commercial insurance types, a subcontractor may require, contact the experts at Panorama today. 

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