Small Business Owners – Ensure that Your Subcontractors Carry Their Own Insurance Policies

subcontractor isn’t covered and an on-the-job injury occurs, you could be held financially responsible.

Suppose you bring in a subcontractor whose employee suffers a back injury while on a client site. The subcontractor company is uninsured – but that won’t stop the employee from seeking damages. When he doesn’t get any compensation from his own employer, your company is the next logical place to turn. And unless you’re paying premiums to cover contractors, he may not be covered by your workers’ comp insurance, so you could be either paying his medical bills out of pocket or facing a lawsuit.

As with general liability insurance, you can require in your contract that independent contractors carry workers’ comp insurance. Alternately, you can add the subcontractor’s employees onto your own policy, and then pass the costs on to the subcontractor as part of your agreement.

Professional Liability/Errors & Omissions

Many clients will require you to carry errors & omissions insurance, just in case a mistake you make on the job costs them money. They want to be sure you’re able to compensate them in the event of a financial loss caused by your company’s error. So whether the person who makes the mistake is an employee or an independent contractor, you want to be sure you’re covered with E&O insurance.

When shopping for a professional liability policy, look for clauses that protect your company from claims related to