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Subcontractor vs Contractor: Do They Both Need General Liability Insurance

Subcontractors and contractors are key components in many projects, from large construction projects to web development projects. When working on a project both the contractor and the subcontractor will need the appropriate insurance to protect themselves from potential financial liability. 

When you work with a contractor or subcontractor, it is important to make sure that they have insurance. Understanding the different types of insurance and what they cover is critical.


Why is General Liability Insurance for Subcontractors Important?

General liability insurance for subcontractors and contractors is a must-have. This type of coverage offers protection against:

  • Property Damage: Sometimes a property can be damaged while contractors and subcontractors are working on it, whether intentional or accidental.
  • Injuries: If someone is injured due to the contractor’s or subcontractor’s work, then the policy will cover any medical expenses that arise.
  • Defamation: In cases of slander or libel suits, general liability insurance will provide coverage against them.

It is important to note that this type of insurance does not cover any claims related to professional negligence on the part of the contractor or subcontractor. Professional negligence occurs when the contractor or subcontractor fails to fulfill their responsibilities to a required standard.  


Are Subcontractors Covered Under Contractors Insurance?

No, subcontractors need their own general liability policy to be protected from potential financial loss due to a claim. While some contractors may require their subcontractors to carry specific types of coverage, it is ultimately up to each individual subcontractor to secure their own coverage. 

General liability insurance for subcontractors can often be secured through companies specializing in contractor insurance.


What Other Types of Insurance Do Subcontractors and Contractors Need?

In addition to general liability, both contractors and subcontractors should consider purchasing the following:

  1. Workers’ Compensation: Workers’ compensation is particularly important for contractors and subcontractors who work with employees, as workers’ compensation protects against claims that arise due to injuries or accidents on the job.
  2. Commercial Auto Insurance: Contractors and subcontractors who use their own vehicles in the course of their work should carry commercial auto insurance to protect them from any losses incurred due to an accident involving a company vehicle.
  3. Professional Liability Insurance: This coverage provides protection if a contractor or subcontractor is sued for errors or negligence related to the services they provide.

Benefits of Securing Insurance for Subcontractors

As a subcontractor, having the right insurance in place is essential to protect yourself and your business. It allows you to keep working without the fear of financial liability should something go wrong. In addition, it can help build trust with clients since they will know that you are adequately insured.


Bottom Line

Bethany Insurance can help you secure the general liability insurance that your business needs. Our experienced team can help you so that you can have peace of mind knowing your business is protected from potential financial losses. Contact us today to learn more about our business insurance packages and how they can protect your company.