FINANCE & INSURANCE 63 PLUG SUBBIE LIABILITY GAPS


Daniel Sunley at Clear Insurance Management discusses insurance best practices when engaging subcontractors, and addresses common misconceptions around liability to help developers ensure that their agreements protect their interests.


I


t’s no secret that UK housebuilders are battling a shortage of skilled workers, and that the use of subcontractors is mitigating this to some extent, as ain contractors turn to this  eible labour pool to boost their resources on construction projects. However, while this approach has gone some way to bridin the workforce defi cit, it has also given rise to some confusion about insurance liabilities and with whom they ultimately rest.


The primary liabilities that insurance covers in this context are: • Employer’s liability for employees and for any persons for whom the subcontractor may act as ‘labour master’


• Public and product liability for


injury or damage to third parties or their property


• Professional indemnity insurance to cover fi nancial loss to third arties because of an error or omission in executing the subcontractor’s professional activities.


Legally, the main contractor is responsible to their client for completing the housebuilding project. To guarantee that this happens, all subcontractors must ensure that they have suitable liability insurance to undertake work on the latter’s behalf. Additionally, the main contractor must ensure they have cover in place for any work done by the subcontractor. Both parties’ policies must provide adequate cover for any work


that is carried out, in all respects of a particular project.


THE GOLDEN RULE


On the face of it, this may seem like a duplication of costs and effort, but it makes sense. Should a relevant event occur concerning the subcontracted works, the claim will likely be brought against the main contractor in the fi rst instance since they have a leal agreement with the client to carry out the work.


This point is critical, because if the main contractor fails to take out cover for the subcontracted activities, there is, effectively, no insurance cover. And without adequate cover, there can be no provision for legal defence costs or


IF THE MAIN CONTRACTOR FAILS TO TAKE OUT COVER FOR THE SUBCONTRACTED ACTIVITIES, THERE IS EFFECTIVELY NO INSURANCE COVER


WWW.HBDONLINE.CO.UK


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84