Contractor Insurance: Do You Subcontract Work?

Things seem to really be booming here in Austin, Texas these days. Lots of growth, which is a good thing, right?!? But with this growth comes more work for contractors. I get a lot of calls from contractors and general contractors needing insurance for various projects. In most cases, they have insurance requirements they are trying to fulfill, so they call me for an insurance quote. When it comes to Business Insurance, insurance companies want to know about work that is subcontracted out. Primarily, what type of work is subcontracted, the percentage of work/sales that's subcontracted and if the companies subcontracted out carry insurance limits greater to or equal to yours. 

Sometimes business owners want to know why the insurance company needs all this information. The bottom line, the insurance company is insuring your business. The policy is not going to be in the subcontractor's name, so understanding the entire scope of business and what is subcontracted is very important to underwriting. At the end of the day, if your business is sued, it's your business insurance that's going to have to defend it. After the work's completed, the subcontractor could be long gone or out of business and you could be responsible for their work. When choosing a subcontractor, consider the following tips:

1. How much experience do they have?
2. Do they have any past or pending claims? If so, what are they doing to prevent future claims?
3. How long have they had insurance?
4. Do they carry Workers Compensation Insurance? 
5. Do they have a safety plan in place? 
6. Does their policy have an exclusion for completed operations? 
7. Will they list your business as an additional insured?
8. Will they carry insurance greater to or equal to yours? 

This is just a sample of questions to ask a subcontractor. There's many more depending on your business. If you have any questions, or need a Business Insurance quote, please feel free to contact me. I am a local agent in Austin, Texas and would be happy to sit down and meet with you. 

Jason Matison
Insurance Agent
Austin, Texas

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