Subcontractor insurance

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Page written by Chris Godfrey. Last reviewed on September 24, 2024. Next review due October 1, 2025.

Because they are on the front line of any project, subcontractors and their teams are most vulnerable to financial loss caused by accident, personal injury, claims for property damage, theft of tools and materials, or business interruption. To protect themselves from these types of risk, subcontractors will buy subcontractors’ insurance. This is specialist cover designed exclusively for subcontractors and available with many different options to suit different business needs. Build a custom insurance package that protects your business from every eventuality.

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What is subcontractors’ insurance?

Subcontractors are specialist tradespeople who supply their unique skills and tools to complete part or all of a project. Most subcontractors work within the construction industry, but they also support IT, telecommunications, research, the energy sector and more. Subcontractors’ insurance is an umbrella term for a range of policies that protect these professionals from financial loss in the event that things go wrong on a project. Most subcontractor insurance packages will include cover against third-party personal injury and property damage, accidental death, tools and equipment loss or theft, legal expenses, and employers’ liability.

Why do you need subcontractors’ liability insurance?

Firstly, if you have employees or you hire labour-only subcontractors, you must have employer’s liability insurance by law. This is a type of business insurance that protects you and your employees, (including those who no longer work for you), should they be injured or become unwell as a result of working for your business.

Secondly, it doesn’t take much to cause an accident, and errors and omissions are common in business, as is theft of tools, equipment, materials and vehicles. Any of these issues could make you liable for devastating compensation claims and legal costs, as well as creating expensive disruption for your business. If you operate in a high-risk industry, such as construction, you simply cannot afford to be without insurance protection. One slip, one fall, one piece of heavy machinery lost, and your business could be gone forever.

What does subcontractors’ insurance cover?

Subcontractors’ insurance can cover everything from a sprained ankle or a scraped vehicle, to a major fire or total loss. Depending on the industry you work in and the work you do, you should purchase essential cover and then add optional extras according to your circumstances:

Essential subcontractor cover

Public liability – covers you in the event your work causes personal injury or property damage to a member of the general public, your clients, customers or suppliers.
Accidental death – provides compensation in the event that an employee is killed whilst working for you.
Employer’s liability – protects you and your employees should they be injured or become unwell as a result of working for your business.
Tools and equipment – protects your vital tools and equipment from damage, fire, flood, or theft.
Legal expenses – pays for legal advice and representation in the event of any claim or business dispute.

Optional subcontractor cover

Product liability – covers you from claim in the event that products or materials you have supplied are faulty. (You don’t have to make the products or materials to be at risk, simply distributing or providing them can make you liable for claims of personal injury or property damage).
Professional indemnity – essential for subcontractors who provide expert advice, information and skills – such as designers, architects and chartered surveyors. This policy covers you in the event that erroneous information you have provided creates a financial loss for a client or customer.
Owned-plant insurance – covers the caravans, site huts, light and heavy machinery that you own from damage, theft, fire and flood.
Hired-in plant insurance – similar cover to above, except this policy protects the machinery and plant that you have rented or leased from a supplier.
Stock and inventory – protects you from loss if the unsold goods and raw materials you hold in stock are stolen, damaged, or lost to fire or flood.
Contents insurance – pays out in the event the contents of your business premises (including construction sites and site offices), are stolen, damaged, or lost to fire and flood. This is essential cover if you operate a workshop or office. Protect your equipment, computers, furniture and more.
Van and truck – it is illegal to drive an uninsured vehicle on US roads – including commercial vehicles. Protect your vans and trucks and their contents from fire, theft and accident.
Goods in transit – covers your raw materials and finished goods as they travel from A to B. This applies to shipping in your own vehicles as well as those of third-party couriers.
Cyber-insurance – protect your technology from cyber criminals with a policy that covers malicious malware, hacking, phishing, ransomware and more.

How much does subcontractor insurance cost?

Premiums for some subcontractors’ insurance can start at less than $29 per month, but the cost you pay will depend on your business type, the sector you work in, and the risks attached to what you do or sell.

How Swoop can help

All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let an accident or oversight become a catastrophe for your business. Contact Swoop today to compare top-quality subcontractors’ cover from different providers and to discuss all your business insurance needs.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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