How To Hire The Right Sub-Contractor

As a general contractor, you most likely rely on at least one sub-contractors who can lend your business their expertise in a certain area or expand your geographic location for job bids. If you have never enlisted a certain sub-contractor’s services before, it can be difficult to know whether or not they are the right person or crew for the task.

First, you should never hire any sub-contractor who refuses to sign a detailed and comprehensive written agreement. This is a huge red flag that they may not be trustworthy. That agreement should contain and clearly detail the expectations of both parties and the work to be completed. What some contractors overlook, however, is including important language that can protect their company.

The document should specify that sub-contractors are not your employees and that they are responsible for paying their own taxes and benefits. The document should contain a stipulation allowing you, the contractor, to terminate the agreement within a certain amount of notice. Another important provision is a statement that the sub-contractors are to obtain and maintain worker’s compensation, general liability, automobile liability insurance, and any other types of important insurance coverage for the job. You should always ask the sub-contractor for a certificate of insurance, and take note of the expiration dates and limits of their policies. Requesting a certificate of insurance does not transfer any risk, but it does tell the contractor whether those you hire have sufficient coverage.

To adequately transfer the risks from your company to the sub-contractor, require them to sign a “hold-harmless” or indemnity agreement, which are non-insurance, contractual agreements. This basically means the sub-contractor agrees to take responsibility in the case of a lawsuit against your business as a result of an incident related to their work.

As you are searching for professionals to handle jobs in their fields of expertise, consider enlisting the services of our knowledgeable, independent insurance agents. We can help you review your current insurance policies to identify gaps in coverage and compare them to several different policies from a variety of providers, ensuring the coverage you buy will offer the best protections at the lowest rates. Contact us to assist you in finding the most comprehensive contractor’s insurance coverage at rates you can afford.

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