Using subcontractors does not automatically remove a trade business’s responsibility for the work. The arrangement should be disclosed accurately to the insurer.

What information may the insurer require? #

Insurers can ask about:

• The work being subcontracted.
• Amounts paid to subcontractors.
• Whether they work under your direction.
• Whether you remain responsible to the client.
• Their qualifications and licences.
• The insurance they maintain.

A material increase in subcontractor use can affect premium, insurer appetite and policy conditions.

Should subcontractors have their own insurance? #

Generally, current evidence of suitable Public Liability Insurance should be obtained and retained. Depending on the work, Professional Indemnity or other specialist cover may also be relevant.

Their policy protects their business and does not automatically protect yours. A Certificate of Currency also does not prove every activity is covered.

What about workers compensation? #

Calling someone a subcontractor or having them submit invoices does not determine their status for every legal or insurance purpose.

Workers compensation rules differ between states and territories and can treat some contractor arrangements as employment. Obtain advice from the relevant state or territory authority.

What records should be kept? #

Keep written agreements, licences, insurance evidence, scopes of work and payment records. Tell Webber Insurance if subcontractor arrangements change materially.