As a contractor, it's in your best interest to transfer your risks down to your subcontractors for their negligent acts performed on your behalf. The failure to transfer these risks to an at-fault subcontractor may make you responsible for their negligent acts, expose you to uninsured or underinsured liabilities, and result in higher insurance costs for your business.
3 steps to creating an effective risk transfer program
Step 1: Understand the basics of risk transfer
Learn how incidents involving subcontractors can lead to lawsuits and understand important provisions of a subcontractor agreement and why it is always best to seek the counsel of a qualified construction attorney.
Step 2: Find a qualified contractor
A subcontractor prequalification process will help you select a contractor who possess the necessary skills, experience, financial stability, insurance and safety qualifications to successfully fulfill your specific project needs.
- Best practices for selecting a contractor and setting up a jobsite (PDF)
- Sample pre-qualification template
Step 3: Implement your contractual risk transfer program
Check all the boxes to help ensure that minimum insurance and contractual provisions are met for your project.
- Risk transfer setup guide for contractors (PDF)
- Contractor’s checklist: Minimum contact insurance requirements and limits (PDF)