Does anybody know if it is necessary to have commericial liability insurance when all you do is sub contract. I have been told by the contractor that I push for said all I need is insurance on the truck.
Say there is a slip and fall at an account you plow, for another contractor. Whatever reson, his insurance has lapsed, forgot to make payment, make up your own scenario out of the endless possibilities. The slip and fall attorney will cast a wide net, so to speak, and you will be under it, and truck insurance will not cover "completed operations", which is what slip and fall and the like fall under.
The snowplowing portion of my liability insurance comes out to a whopping $270 per year. I think its money well spent. But others who have posted here have in the past indicated 20+ years of business being self insured with no problems. Its technically "not necessary". But you make the call.
I agree with Bill. Also, if you have an accident there is also the possibility that the contractor may not back you up and leave you on your own, because you were the sub. Now nobody knows if this would/could actually happen, but you can never be too careful these days. Again, liability insurance is only around three hundered bucks for about $1 million, so in my opinion, it's definately worth it.
By the very fact he is asking for liability ins, shows he is a pro. We require it, all pros do from subs. It will cost less than $ 700.00 for business liabilty with a 1,000,000.00 policy, less for 500K and 300K.
Now what most people dont know, is that you need commercial ins, on the truck. What was told to me was, going forward, the business ins cover you, in reverse the truck ins covers you.
Your contractor you work for could be right. For my subs all I require them to have is insurance on the truck. I must have a copy of that in my files, and by no means is the insurance to lapse. Then I cover them as additionally insured drivers on my liability insurance. I also require a driving background check. If my drivers want to supply there own liability ins, that is fine, but that is for there peace of mind, not mine. I will still cover thm on mine, in case they let there ins. lapse, I MUST know I am covered.
So maybe to know you are safe, get a copy of his insurance stating you as addit. insured. This way, you are covered and it really only costs the contractor 0 money, because he will pay out on the amount of payroll either way.
You can ensure there is no lapse in insurance by getting a "Certificate of Insurance" through that contractor's insurance company. (Get it directly from the insurance company, NOT a copy from the contractor) Now if there is a lapse or a cancellation of that policy, you are immediately notified by that insurance company.
As you get larger, your insurance carrier will audit you yearly once the premiums get high enough to "trigger" the audit. At audit, the carrier will backcharge you for the lack of CGL coverage on the part of your sub(s). The cost can be quite excessive. Dino's right. If the guy is asking for it - he's a pro. Get it to cover your butt..... The possible alternative can be major league expensive.....