In a business as risky as the construction industry, having the right insurance is critical for protecting a company from legal and financial damages. General contractors who lead a construction project frequently hire subcontractors to complete at least some portion of the job. Contractors typically carry general and professional liability insurance, but are subcontractors covered under contractors insurance? The short answer: it depends. As a contractor, you should be aware of your own professional responsibilities when it comes to liability protection.
Ultimately, it is the general contractor who carries the burden of responsibility on a project. While it is often assumed that the contractor’s general liability insurance will cover accidents and negligence for the entire job, including those tasks completed by a subcontractor, this is not necessarily the case. A contractor needs to be aware of exclusions listed in their policy, as often this is where subcontractor coverage would be found. The same holds true with professional liability insurance. Though a subcontractor should carry their own errors and omissions coverage, if they do not, or if it is insufficient, the financial burden falls to the contractor. Source: www.huntersure.com.
There can be a lot of confusion surrounding liability protections for general contractors. It is in the best interest of contractors to understand their policies and seek clarification from knowledgeable agents when the policy is unclear. The security of your business and your reputation might well depend on it.