Mandatory Subcontractor Procedure

Introduction:

This document outlines the mandatory procedures to be followed when hiring subcontractors. Adherence to these guidelines is crucial to protect our agency/company, our clients, and ensure compliance with carrier requirements. Failure to comply can result in penalties, coverage issues, and potential financial losses.

You are going to get some pushback on this, we need to frame it as we are trying to keep them in business and keep their insurance low. They may "trust" their subcontractors but a handshake will only go so far.

The best way to think of this is as a "Prenup". That will bring some humor to the conversation. Even though everything is going good in the relationship, the prenup is for the future should something go wrong (for both parties).

Core Requirements

Certificate of Insurance Requirements

- General Liability:
  - Carrying equal to or greater limit to your own (the contractor hiring the sub)
  - A-rated carrier
  - General liability is on a per-project basis
  - Additional Insured Verbiage/Description of Operation Box: Must include:
    - Project name and address
    - Specific operations and including cleanup
    - Projected start and finish date
    - Listing your business as additional insured with ongoing and completed operations
  - Waiver of subrogation and primary non-contributory endorsement in your favor or blanket endorsement
- Workers Compensation Requirements:
  - $500,000/$500,000/$500,000 limits
  - Owners Included Showing “N” in box
- Commercial Auto Policy: (if they have it)
  - Listing your company as additional insured
  - Hired and non-owned endorsement

How to Read a Certificate of Insurance

Documents Needed to Be Signed

- Contract or work orders
- Hold Harmless agreement in your favor (ensure the document is final and not a sample)
- Subcontract agreement/contract (ensure the document is final and not a sample)

Client Communication

Carrier Specific FAQs

Utica: https://www.streetsmart.insurance/faq/utica-first-business-risk-protection/
Selective:
- - https://www.streetsmart.insurance/faq/selective-subcontractor-agreements/
  - https://www.streetsmart.insurance/selective-contractors/
Generic for every other Carrier: https://www.streetsmart.insurance/faq/subcontractor-agreements/
What to look for in a COI: https://www.streetsmart.insurance/faq/hiring-subcontractors-heres-what-to-look-for-on-their-certificate-of-insurance-coi/

Email Campaigns

FAQ Generic Subcontractor Agreement
FAQ Selective Subcontractor Agreement
FAQ Utica First Subcontractor Agreement

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