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Subcontractors insurance. What is subcontractors insurance?


Subcontractors insurance encompasses various business insurance coverages to suit small businesses and subcontractors.

Insurance for subcontractors protects against financial losses and debts resulting from serious work-related accidents and emergencies.

Our article will examine the following topics:

  • What is subcontractors insurance?
  • Who needs subcontractors insurance?
  • Are subcontractors covered under the contractor’s insurance?
  • What does subcontractor insurance cover?
  • What kind of insurance does a subcontractor need?

  • General liability insurance for subcontractors

  • Errors and omissions insurance for subcontractors (E&O).

  • Are subcontractors required to have insurance?

  • Subcontractors insurance cost

What is subcontractors insurance?

Subcontractor insurance is necessary for many types of small business owners. This kind of insurance can help to protect your business if an unexpected issue occurs.

A subcontractor could be sued for several reasons, even in cases where they’re not at fault, and they might face a costly legal battle.

Contractor insurance protects your business from injuries sustained while working, damage to your equipment, lawsuits, and more.

Having the right insurance policy can protect against these kinds of risks.

You may also need subcontractors insurance to secure certain contracts, as you may need to provide your proof of insurance before being hired by a contractor.

Furthermore, depending on your local authority, you may be required by law to have subcontractor insurance coverage.

Who needs subcontractors insurance?

Subcontractors and independent tradespeople should carry commercial subcontractors insurance.

As mentioned previously, this insurance protects your business assets and is often required by many employers, clients or contractors before you can start working for them.

You will find that these tradespeople and those working in the construction industry need subcontractors insurance:

  • Handymen.
  • Roofers.
  • Painters.
  • Landscapers.
  • Electricians.
  • Carpenters.
  • HVAC Contractors.
  • Alarm Contractors.
  • Plumbing Contractors.
  • Construction Contractors.
  • Railroad Contractors.
  • Pool and Spa Contractors.

Are subcontractors covered under the contractor’s insurance?

Typically, subcontractors aren’t covered under an employer’s insurance policy or those of independent contractors. These employers aren’t required to provide cover for subcontractors.

Therefore, if someone sues the employer or the contractor you are working for, you might face the same liability risks as your employer, but without their insurance protecting you.

That’s why subcontractors need to obtain their own coverage and purchase small business insurance.

Insurance for subcontractors can protect you from unexpected and expensive lawsuits, workplace accidents and property damage, which could see you out of pocket.

What does subcontractor insurance cover?

Typically, subcontractor insurance can include several different types of business insurance.

Subcontractor policies usually cover business liability expenses and risks, such as serious injuries at work or damage to a client’s assets for which the business is responsible.

These injuries and damages would be covered by general liability insurance, which is a vital component of a subcontractors insurance policy.

Subcontractors insurance can also extend to cover business vehicles and business employees, depending on the coverages selected.

In summary, your business can choose different types of coverage to create your customized insurance plan. We go into detail about those coverages below.

What kind of insurance does a subcontractor need?

It’s simple to gauge why you need subcontractor insurance, but not as straightforward to know what kinds you need. However, most employers and contractors specify the types they require in each contract they sign, and we have handy articles like this to help.

As the employee or subcontractor, you may be asked for proof of subcontractor insurance, such as a certificate of insurance in PDF format.

You may also be required to name the employer as an additional insured on your liability insurance policy.

Let’s take a look at what kind of insurance a subcontractor needs in more detail.

General liability insurance

The first insurance policy that subcontractors and small business owners usually buy is general liability insurance.

This insurance type provides liability protection for third-party bodily injuries, property damage, advertising injury and against lawsuits.

You’ll find that many employers won’t work with subcontractors unless they have this coverage.

Let’s take for example, if you accidentally damage a client’s computer, your general liability coverage would help you to pay for any potential lawsuits and legal expenses.

If a claim is made over a website you created and your client sues you for copyright infringement, your general liability policy would also offer financial protection and peace of mind.

Business owner’s policy

A business owner’s policy, also known as BOP for short, combines both general liability insurance and commercial property insurance.

The two insurances combined are usually offered at a discounted rate, making them cheaper than if you bought each coverage separately.

A general liability policy insures you against any damages to another party’s property, it does not financially protect your own assets.

Instead, BOP would provide coverage to help you face personal damages, for example, if a fire damaged your laptop or commercial property. BOP coverage eases the financial burden of these kinds of risks.

Errors and omissions insurance (E&O)

Errors and omissions insurance or EO for short is also known as professional liability insurance.

This kind of insurance offers financial protection if a client accuses you of making mistakes on the job or failing to meet the specifications of a contract.

In the case your employer gets hit with a professional liability lawsuit, their insurance policy will not protect you if you’re involved in the incident. This coverage is also a required policy in many contracts.

Workers’ compensation insurance

Most countries require workers’ compensation for businesses with one or more employees.

For a subcontractor, workers’ compensation will cover you if you cannot work. It offers financial protection in case you experience a loss of income due to a work-related injury or illness.

For example, suppose you injured your back while performing construction tasks, fell from a ladder, and are unable to work while you heal. In that case, your regular health insurance might not cover you, whereas worker’s compensation would, and it can make up for some of your lost earnings while you recover.

Some contractors and employers require subcontractors to have this kind of policy. Your employer may add you to their existing policy, but the catch is that you will have to pay the cost of coverage.

Hired and non-owned auto insurance

If you use your own personal vehicle for work and experience an accident, your personal auto insurance policy likely wouldn’t cover you.

Hired and non-owned auto insurance (HNOA) offers protection, for any personal, rented, and leased vehicles used for business purposes.

It provides financial protection against cases you’re at fault in an accident to cover the expenses for bodily injury, property damage, and related lawsuits.

You can usually add HNOA coverage to your current general liability insurance or BOP, but remember that this kind of insurance does not include damages to your vehicle caused by a collision, so you will require a separate policy for that.

Commercial auto insurance

This kind of insurance policy is similar to your personal auto liability insurance but specifically covers business-owned vehicles.

In case you experience an accident during working hours, using your business vehicle, this coverage will help you financially recover from the costs.

Commercial auto insurance also insures you against vandalism, theft, and weather-related events.

Fidelity bonds

If an employee commits theft, fraud, or forgery against a client or your business, fidelity bonds protect your company from financial loss.

It’s worth noting that some contractors and businesses require fidelity bonds.

Certain insurance companies sell fidelity bonds and some companies specialize in them.

Are subcontractors required to have insurance?

While it’s not legally required, insurance for subcontractors is highly recommended for the financial protection it can offer you. Additionally, it offers advantageous benefits when bidding on contracts and signing deals.

Having a certificate of liability insurance for subcontractors lets clients know that you are proactively taking accountability for your work and you mean business.

Many companies prefer to hire subcontractors who already have their own insurance coverage, as it’s less hassle for them if you’re covered and insured.

The specific insurance coverage you may need depend on a few factors, these include:

  • Your line of work and specialization.
  • The clients you work with.
  • Hazards you face and exposures to risk.


Subcontractors insurance is vital for protecting your small business and self-directed line of work if unexpected issues and accidents should occur.

With customized subcontractors insurance coverage, you’ll know that any work injuries or damages will be financially taken care of.

While it may not be legally required, insurance for subcontractors is strongly recommended for the protection and benefits it can offer you.

Subcontractor insurance lets your potential employers know that you are ready to start working as safely as possible and as soon as you’re hired.

If you’re considering subcontractor insurance to cover your small business, it’s important to understand what you can expect to pay and to know your options.

Subcontractors insurance cost

Many factors determine subcontractor insurance costs, including:

  • Your line of work and specialisms.
  • How long you’ve been in business.
  • Any previous claims and claims history.
  • Your average annual income level.

The amount of insurance you need - higher coverage limits also come with higher premiums.

Subcontractors insurance quotes

When considering what types of insurance are needed for your small business, it’s important to do your research and receive various quotes to know your options.

It’s simple to sign up for contractor insurance and obtain a free quote today.

Subcontractors Insurance USA

For companies registered in USA you can receive quotation from Tech Insurance.

Subcontractors Insurance UK

For companies registered in UK you can receive quotation from Simply Business.

Subcontractors Insurance Cyprus

For companies registered in Cyprus you can receive quotation from Pitsas Insurances by completing the quotation

Our team of insurance experts can work with your financial budget to help you secure customized commercial auto and business insurance policies.


Pitsas Insurances

Paphos, Cyprus


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