Subcontractors can be a valuable asset to any construction project, but they also come with their own set of risks. Ensuring that any subcontractors you hire have proper insurance coverage is essential to mitigate potential liability issues down the line. In this article, we will explore the minimum subcontractor insurance requirements that your company should be aware of.
General Liability Insurance
General liability insurance is a must-have for any subcontractor. It protects against claims of bodily injury or property damage caused by their work. This coverage will also provide protection for damage caused by subcontractors to other parts of the job site or surrounding properties. The minimum coverage limit for general liability insurance should be $1 million per occurrence and $2 million aggregate.
Workers` Compensation Insurance
In most states, it`s mandatory for companies to carry workers` compensation insurance to cover medical bills and lost wages for employees who are injured on the job. However, subcontractors are often not considered employees of the general contractor, and it`s their responsibility to cover their own workers. As a result, subcontractors should be required to have their own workers` compensation coverage as a minimum requirement.
Commercial Auto Insurance
If your subcontractors will be using their own vehicles for work-related activities, they should have commercial auto insurance. This coverage will provide protection in the event of an accident or collision, and it covers any damage done to other vehicles or property. The minimum coverage limit for commercial auto insurance should be $1 million per occurrence and $2 million aggregate.
Professional Liability Insurance
Professional liability insurance is essential if your subcontractor provides professional or design services. This coverage protects against errors and omissions made by the subcontractor that could cause harm or damage to the project. It`s important to note that not all subcontractors will require this type of coverage, but it`s still worth discussing with them to make sure they have adequate coverage for the services they provide.
In conclusion, it`s vital to ensure that any subcontractors you hire have adequate insurance coverage to protect your company and the project. The minimum requirements for subcontractor insurance include general liability insurance with limits of $1 million per occurrence and $2 million aggregate, workers` compensation insurance, commercial auto insurance with limits of $1 million per occurrence and $2 million aggregate, and professional liability insurance if applicable. By following these minimum requirements, you can rest assured that your project is in good hands.