Home Building - Subcontractor Insurance

Home Building - Subcontractor Insurance

From: Sun

"I want to build an addition. The man I want hire is now a foreman who used to have his own building company, but now is just overseeing things for another contactor and does not have insurance. What do you think?"

Hi Sun,

One of the “cardinal rules” of being a General Contractor is: Anyone you hire to do anything on your property needs to be insured for both general liability and workman’s compensation.

(Note: I have answered this type of question in the past, but I know it’s almost impossible to find prior blogs. I have the same problem, so I use the “search blog” in the upper left corner. Just a key word will suffice for a search. On my web site, you can perform a similar search for information using the Google seach box on the bottom left of any page.


Whether you are building a new home, remodeling a home, building an addition, or just hiring someone to do some kind of general labor on your property on the weekend be absolutely sure that they are all insured.

Anyone you hire to do anything needs to be insured BEFORE they set foot on your property.


Certificate of Insurance
(For a larger sample in a PDF file, click here)

They must provide you with a copy of their “Certificate of Insurance”. This Certificate provides proof that the person or company named on the Certificate has “General Liability” coverage, and carries “Workman’s comp” for his or their employees.

Hire absolutely no General Contractor or subcontractor who does not carry insurance. These commercial policies are paid in advance for a whole year, and can’t be canceled. So, check the dates on the certificate.

Also, remember: In every case, you are technically the builder or general contractor, and you will get the job done by subcontracting with others.

A subcontractor (sub) is an individual or a firm that contracts to perform part or all of another contract (job).

You will pay for the project by setting a predetermined contract amount with each sub. This is important. You will have no hourly wage employees working for you, which means you will avoid all of the governmental red tape and taxes concerning employees.

Your subcontractors are not considered to be employees.

And finally: If a worker is injured on the job, on your property, and they are not insured, they can come “after you” for money. Yikes!

Nuff said?

Carl