Are Your Subs Covered by your Insurance Policy?

The insurance industry is changing and new policies will have a drastic impact on how underwriters deal with their subcontracted customers. What this may mean is that your old policy will no longer cover your sub-contractor or that your fees will increase to cover workmen’s compensation.

The policy changes come amidst a more in-depth look at the real liability that insurance underwriters face when they cover sub-contractors. When an underwriter evaluates the risk, they will refer to OSHA’s Data on which safety citations and fines are most commonly listed against contractors and sub-trades and whether you or your sub-contractor have been affected.

If you have been issued safety citations, these may affect your standing with your insurance company. If you want to check whether your sub-contractors have been cited to avoid higher premiums, the process is fairly simple.

  • Go to the OSHA website and find the Data & Statistics page.
  • Now click on the ‘Established Search’ section (top left hand side).
  • Enter the name of your sub-contractor.

If your favorite sub-contractors have received a citation, it doesn’t mean you can’t use them. Ensure that the reason for the citation has been remedied and speak with your insurance firm to see if their citation will affect your rates.

Be sure to get documentation that shows how the issue has been remediated and for proof of safety compliance. Ask for documentation of the safety training and protocols that the firm will follow on your jobsite and a written safety agreement so that you can pass these in to your underwriter.

If you or your sub-contractors don’t have a written safety agreement, ask your attorney to help you draft one which includes the appropriate safety clauses. The subcontractor should agree to follow all of your safety clauses (following OSHA guidelines and safety standards).

Some examples include safety gear on the jobsite for all workers, proper fall protection systems for employees who are working at or above heights mandated by OSHA, proper ladder systems with guardrails etc.

In fact, be sure to request documentation from all of your sub-contractors, even if they have never received an OSHA citation.

Companies that receive citations will be inspected at a later date, so you must ensure that the issue has been fixed in the event that the OSHA inspector decides to conduct their follow-up inspection on your jobsite.

Your sub-contractors should also inform you of any safety hazards they may introduce to the site so that your workers can be aware of them and manage your jobsite appropriately.

Creating safety protocols for your employees and sub-contractors will help to prevent injuries and deaths and may help to reduce your premiums while creating a safer, healthier jobsite for your crew.

This is not an exhaustive list, just some pertinent points to consider. Speak with your insurance agency and lawyer to check that you have all the cover you need.

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