Subcontractor

What Does Subcontractor Mean?

A subcontractor is a contractor hired by another contractor to assist in completing a job. While subcontractors are commonly associated with construction, they are utilized in various other industries as well. In the context of insurance, subcontractors are not always covered under the contractor’s liability insurance policy.

Insuranceopedia Explains Subcontractor

The coverage of a subcontractor under the contractor’s liability insurance can have significant financial implications if an accident caused by the subcontractor occurs. For instance, if a subcontractor at a construction site accidentally backs a truck into a structure, causing it to collapse, the contractor could face substantial financial losses if the subcontractor lacks insurance. The kind of policy that would respond to that situation is general liability insurance, which covers property damage and bodily injury claims that come from the work itself. To mitigate such risks, many contractors require subcontractors to carry their own liability insurance before hiring them. This is usually a basic independent contractor business insurance policy, which is what most one-person trades and small crews already buy in order to land work with bigger companies. This requirement often extends to workers’ compensation insurance as well. Contractors who hire out work also want to know what their own coverage will run, and typical numbers are broken down on this page about general contractor insurance costs.