When it comes to working with subcontractors, it’s incredibly important to know who is responsible for their insurance cover.
If the answer is ‘them’ can you really be sure they have adequate insurance cover? And, more importantly, what will happen to you if they aren’t covered?
Auditing each worker is the best way to ensure that not only are their insurance policies up to date but that they are accurate too. If not, it makes sense to cover yourself and your company at the same time.
There are two major types of insurance cover that will ensure you’re fully protected:
The first thing you need to do is determine whether a subcontractor is a labour-only subcontractor or a bona fide subcontractor. Labour-only subcontractors are treated in law as though they are employees rather than freelancers.
It’s these labour-only subcontractors that require Employer’s Liability Insurance, especially if they work directly under your supervision using your materials, equipment and tools.
If all of your workers are bona fide subcontractors, Employer’s Liability insurance is not required.
If you’re the one in charge of the work site, third parties will probably claim against you for any damages even if it was a subcontractor who was to blame.
If the subcontractor is bona fide, with adequate indemnity limits to deal with these claims, it’s important to check that their insurance covers all activities that they are engaged in.
You should always keep records of each subcontractor’s insurance policies and these records need to be held for several years. Liability claims can be made against you several years after an accident.
If you’d like to speak to us about your options or have any questions regarding being fully insured for your subcontractors, get in touch on 01476 434050.