You’ve vetted the subcontractor, requested and received proof of insurance, and have granted him access to your jobsite. A few weeks into the job, his faulty work causes a fire and extensive damage to the jobsite. The property owner expects you to pay all costs resulting from the fire. You communicate this information to the responsible subcontractor and learn at that time that his insurance is no longer valid.
Unfortunately, this situation is not as uncommon as it should be. Your recovery of any funds from the negligent, uninsured subcontractor will likely require lengthy, expensive legal action. In the meantime, your property-owner client expects immediate indemnification from you.
In some cases, your general liability (GL) policy will cover damages resulting from work performed on your behalf by a subcontractor. In other cases, this grant of coverage may have been limited or removed, leaving you responsible for paying any contractually obligated funds to the owner out of your pocket.
If you use the services of subcontractors, schedule a review of your GL policy with your agent or broker today.