In theory when a PRIME contractor hires a SUBCONTRACTOR, and the SUBCONTRACTOR causes a loss, damage, injury, etc., then the SUBCONTRACTOR's insurance should pay the expenses related to that loss. If the PRIME contractor causes the loss, then the PRIME contractor's insurance will pay for the loss.
If the SUBCONTRACTOR does not have insurance (lapsed, fake certificates, etc.), then the PRIME contractor's insurance will have to pay for the loss even when caused by the SUBCONTRACTOR.
In the real world, all parties get sued after a damage or injury loss. Later they sort out which party or parties were At Fault. Most Prime-Contracts now contain language that makes the PRIME CONTRACTOR indemnify and holdharmless the owner, meaning pay for their costs also. Likewise, most SUB-CONTRACTS now contain a language that makes the SUBCONTRACTOR indemnify and holdharmless the other parties.
These are important and tricky legal concepts and should not be taken causually.
Proffessional advice is always recommended.
Some insurance companies will try to deny coverage if the PRIME contractor did not have an "indemnity/holdharmless" agreement in the sub-contract.
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Related Questions
What insurance obligations contractor have if subcontractor has no insurance and caused the loss?
The primary contractor is going to have to cover the loss since the uninsured sub was working for them. It is the General contractors responsibility to make sure his sub-contractors were properly insured.
Does the owner or contractor purchase professional liability insurance?
Traditionally the contractor provides the Insurance. The owner verifies that the contractor has insurance prior to hiring that contractor.
What are the roles and responsibilities of a main contractor?
The roles and responsibilities of a main contractor is to ensure that the project is completed successfully. The main contractor will find subcontractors for the different assignments in the project.
Is a company required to carry workman's compensation insurance on subcontractors?
A company is required to carry workman's compensation insurance on subcontractors. This is regardless of the number of employees a subcontractor employs.
Does a contractor need to be on the subcontractors policy as additional insured?
This is not as simple a question as it may seem. Subcontractors generally carry their own liability insurance. The General Contractor should verify that the sub contractors insurance either matches or exceeds their own policy limits as this is part of the contract terms for almost every general liability policy. In effect if you let an uninsured subcontractor work on your job, unless you endorse your own policy to cover the subcontractor and pay the additional premium, their would be no coverage under the General Contractors insurance policy for liabilities of the Subcontractor. Basically if you get this wrong, the General contractor will be on the hook and out of pocket for all the subs damages with no coverage for it. If you want the subcontractors covered under the General Contractors insurance policy it can certainly be done but will be significantly more expensive as you would be asking to insure a third party''s work.
How is general liability insurance calculated for a general contractor in NY?
Well it depends on the company providing the policy. Most will calculate the premium based on your direct payroll and they could also add in payroll for your subcontractors. If you don't want to pick up the premium charge for your subcontractors you will have to show the insurance company that the subs carry their own liability insurance policy. Hope this helps. By the way NY is a difficult state to even find reasonable liability insurance for general contractors.
What does an insurance contractor do?
The job of a insurance contractor is to find you the best deal possible for your insurance needs. This could be anything from motorcycle to mobile home insurance.
How can a homeowner make sure a roofing contractor pays the subcontractors so that there is no lien placed on the home?
This is very simple. All you need to do is make all checks for payment to the roofing contractor payable to BOTH the roofing contractor as well as any subcontractors or suppliers working on your home. That way, the subcontractors are paid. Another, more complicated method is to have all subcontractors sign lien releases. Lien release forms are available in "Do-it-yourself" forms packages in office supply stores or online. A more accurate, state specific form can be obtained from a real estate attorney in your area.
How much does it cost for contractor general liability insurance?
CGL premium rate are generally based on your annual receipts and your labor costs, payroll and costs of subcontractors. Also effecting your insurance rate will be whether you require your subcontractors provide you with proof of their own liability insurance for their work performed or if you are going to provide coverage for the Subcontractor as well under your own General Liability Policy. This greatly effects the risk factor associated with your coverage. The above being said, You could find a rate as low as 16 hundred dollars a year for a small contractor or several million dollars a year for a very large contractor. It really just depends on the volume of annual work to be covered and the scope of coverage needed.
What is an insured contractor?
An insured contractor is a contractor who carries a Commercial General Liability Insurance Policy.
A contractor and his subcontractor are working the same job and the sub damages the contractors equipment whos insurance pays?
The contractor should make a claim upon the sub-contractors insurance and/or bond. If the sub-contractor defrauded the contractor on having insurance and/or bonding in place then he should report the contractor to the State licensing board, file claim on their insurance, and civil lawsuit (if the insurance company does not directly file or pay).
How much is insurance for a contractor in Idaho?
It depends on what type of contractor. Contact a local insurance agent who will be able to give you a quote.
Where can you purchase contractor insurance?
Contractor insurance can be purchased through the Aegis, Nationwide and Progressive insurance companies. Also, both the Contractors Insurance business and organization sites offer aid on the subject.
What is the difference between a principal contractor and a subcontractor?
The primary contractor is responsible for the entire project and coordinating the efforts of the subcontractors. The subcontractors are responsible for specific trades, such as plumbing, heating, concrete or electrical. General contractors are more like managers and coordinators, but many have a crew of their own and perform some of the subcontract tasks. In most states, it is not legal for a general contractor to perform some of the specialty trade jobs, such as plumbing, electrical or heating.
How much is contractor's liability insurance in Texas?
There is no simple answer to the question. Every contractor has his or her own risks associated with the type and volume of work performed. It could easily be anywhere from 500 to 50,000 dollars or more depending on the risks presented.
How much professional liability insurance does a sole proprietor painting contractor need?
A contractor Buys Commercial Liability Insurance in the contractor class, not professional liability insurance. The amount needed is typically determined by the exposures presented or as specified by the employer.
What is recourse for homeowner whose insurance company paid contractor in full and contractor refuses to complete the job as agreed to with the insurance company?
Your contract with the tradesman is between "You and the Contractor", He did not contract with your insurance company. All the insurance company did is agree to pay the bill for you. So you would need to bring your own civil or criminal action against your contractor depending on the circumstances.
How long does it take for a contractor to pay a subcontractor after a job?
I used to work in the credit dept at Sherwin Williams and always dealt with subcontractors who were late on payments because of contractors. Each contractor is different...some will only pay after the job is final and others will pay as phases of the job are finished; some pay within 30 days (which is rare) and some take as long as 90-120 days. My suggestion to you is ALWAYS find this information out BEFORE you start a job for any contractor and ALWAYS do research on the contractor because some of them can be very shady...make sure the contractor has been around for a while and has an established reputation. I had many subcontractors that were sent to outside collection agencies because the contractors never paid them or they went out of business during a job...either way the subcontractors were the ones borrowing the money therefore, were responsible for paying us. If you are borrowing money for a job with a contractor see if you can pay lenders back by joint check...this way, the lenders are usually more lenient with the subcontractors.
how to get insurance papers of contractor who refuses to give them?
If your contractor refuses to give you copies or originals of the insurance papers, contact the insurance company themselves. If the insurance company name is not known, call the state you live in to inquire.
Can an employer hire you as a subcontractor?
No, never. Employers hire only EMPLOYEES. Contractors and their subcontractors are not employees and are not hired. I engage a contractor by signing a contract, not by hiring her.
What exaclty is contractor insurance?
Contractor insurance is when contractors get injured or hurt during work. The insurance is supposed to cover or partially cover their medical bill for the hospital. http://www.ehow.com/info_7924969_contractor-insurance.html
How much contractor insurance should a condo have?
The answer depends on how the contractor is employed by the association. If the contractor is bonded, insured and licensed -- best practices indicate this is the best position for the association, to require these documents from a contractor -- then the association's insurance requirements are different from those required by an association that hires a casual laborer. Review your insurance requirements with your broker, and describe how you plan to use the contractor on a regular basis, or a one-time basis. Your broker can best advise you about the insurance you need.
Does homeowner's insurance cover a contractor working on my property and has an accident?
No, Your homeowners Insurance does not provide coverage hired workers. A contractor is responsible for his own insurance policy or workman's compensation to cover injuries to himself and his employees. A contractor is not your employee and therefore not your responsibility, he is self employed.
Can general insurance be backdated?
can a contractor have liability insurance backdated to show the company was insured
Where could someone get building contractor insurance?
One can get building contractor insurance from the following sources: Construct A Quote, Simply Business, Hiscox, Trade Direct Insurance, Flint Insurance, Master builders, Building Trades, to name a few.
