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Ensure You Insure


Ashley Hoadley of Darwin Clayton outlines best practice business, when working with bona fide subcontractors.


Bona fide subcontractors are used by many businesses to provide specialist services to customers, and to deliver services over a wider geographical area.


Subcontractors that are used as ‘bona fide’, work under their own supervision and direction, and provide their own materials and tools. A contractor would normally take on bona fide subcontractors to perform a particular job within a larger contract, such as working at height. The subcontractor should have their own liability insurance in place, but it is vital that the main contractor checks this for their own protection.


A specific insurance condition requiring policyholders to maintain a system of checking bona fide subcontractor insurances is often a precedent to liability. This could, in some cases, result in insurers refusing to provide an indemnity in the event of a claim involving a bona fide subcontractor if the condition has not been met.


Checking insurances does not need to be complicated, but you should identify key information prior to the subcontractor commencing work, with an annual review at the time of the subcontractor’s insurance renewal to ensure adequate cover on a continuing basis. Your broker


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should be able to provide you with a simple questionnaire for standard employers and public liability, to be completed by the subcontractor’s insurers/insurance brokers.


What do you


need to check? The bona fide subcontractor insurance checking condition in insurance policies may vary, but typically, this requires you to obtain evidence that they have policies in place providing indemnity for public and products liability with:


• A minimum limit of indemnity – this can vary from £2million upwards, but we would always recommend that subcontractors carry the same limit as your business to comply with contract terms and conditions.


• Cover for the work to be undertaken – ensure that the occupation on the policy is adequate for the subcontracted work.


• Validity for the duration of the contract – if the work is for a specific period this may extend beyond the expiry of the insurance.


• Provision of Indemnity to Principals – this will provide a legal liability to a Principal under the contractors insurance policy if a claim arises out of work undertaken by the contractor.


You will be required to keep a record of their insurer and policy number to provide in the event of a claim. This will enable your insurers to redirect a claim to the subcontractor’s insurers, or seek recovery for their outlay where appropriate.


A specification for the work will help define the competencies you require of potential contractors which can include:


• References or examples of previous work which can be followed up and validated.


• Health and safety policies and procedures with specific risk assessments and method statements for specialist work to be undertaken.


• Evidence of specialist training and certification relevant to the work being undertaken e.g. IRATA qualifications for rope access.


• Proof of financial stability, giving confidence that a contractor will be able to deliver the contract over a period of time.


For more information call Darwin Clayton on 01892 511144 or email info@dcuk.co.uk


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