Why Subcontractors Must Carry General Liability, Workers’ Compensation, and Automobile Insurance
This month, many are looking for a partner—well, so are we—a subcontractor, that is. Just like dating sites ask what you look for in another, we at Park Range Construction have some requirements for those who want to create a relationship with us. When hiring subcontractors for a project, it’s critical to ensure they have the proper insurance coverage. General liability, workers’ compensation, and automobile insurance are not just formalities—they protect property owners, contractors, and subcontractors from potential financial and legal risks. Here’s why each type of insurance is essential for subcontractors.
General Liability Insurance: Protecting Against Third-Party Claims
General liability insurance covers property damage and bodily injury caused by a subcontractor’s work. This is essential because accidents can happen on a job site, and without coverage, legal claims could become a major financial burden.
🔹 Why It’s Required:
- Covers damage to a client’s property during work.
- Protects against injuries to third parties (e.g., a pedestrian getting hurt due to construction activities).
- Shields both the subcontractor and the hiring contractor from lawsuits related to work-related incidents.
Without this coverage, a subcontractor may be personally liable for costly damages or legal claims.
Workers’ Compensation Insurance: Protecting Workers on the Job
Workers’ compensation insurance provides coverage for medical expenses and lost wages if an employee gets injured while working. For subcontractors who employ workers, this coverage is not optional—it’s a legal requirement in most states.
🔹 Why It’s Required:
- Covers medical bills and lost wages for injured workers.
- Protects the hiring contractor from liability if a subcontractor’s employee is injured.
- Helps avoid legal penalties for failing to carry required insurance.
If a subcontractor doesn’t have workers’ compensation coverage, the responsibility for workplace injuries could fall on the general contractor or property owner—leading to costly legal battles.
Automobile Insurance: Covering Job-Related Vehicle Use
Many subcontractors use their vehicles to transport tools, equipment, and materials to and from job sites. Auto insurance is required to cover damages from accidents involving work-related vehicles.
🔹 Why It’s Required:
- Covers vehicle damage and liability in case of an accident.
- Protects contractors from financial responsibility if a subcontractor’s vehicle causes property damage or injury.
- Ensures compliance with state and contract requirements for business vehicle use.
Even if a subcontractor uses a personal vehicle for work, they may need a commercial auto policy to ensure proper coverage.
Ensuring a Smooth and Protected Job Site
Requiring subcontractors to carry general liability, workers’ compensation, and auto insurance is about more than just meeting contractual obligations—it’s about protecting everyone involved in a project. By ensuring proper coverage, contractors and property owners can avoid financial risks, legal troubles, and project delays, creating a safer and more professional work environment.
So if you’re ready to join us at Park Range Construction, contact us today!
Published on 2-1-2025