Many snow operators work as subcontractors for larger companies that hold the client contracts. The prime contractor sells the work, and subs run the routes. It is a good way to build a business, but it does not remove your insurance responsibility. In most arrangements, the sub is expected to carry its own coverage and prove it.
What Prime Contractors Require
- Your own general liability with minimum limits, often matching the prime's contract
- The prime, and sometimes the end client, named as additional insured
- Your own commercial auto for your trucks
- Workers compensation clearance if you have employees, or personal coverage
- A certificate of insurance before you start. See certificates of insurance explained.
Why You Still Need Your Own Coverage
If someone falls on a site you serviced, their lawyer names everyone: the owner, the prime and the sub. The prime's policy protects the prime. Yours protects you. Many primes' policies also require that subs carry their own insurance, so an uninsured sub can create a coverage problem for everyone.
Read the Subcontract
Subcontracts often pass the prime's obligations down to you, including indemnity clauses from the client contract. See snow removal contracts and insurance.
Moving From Sub to Prime
When you start holding your own client contracts, your program changes. See commercial snow removal companies and hiring subcontractors safely for the other side of the relationship.
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Frequently Asked Questions
Does the prime contractor's insurance cover me as a subcontractor?
Generally no. The prime's policy protects the prime. You need your own liability and auto coverage.
What limits do subcontractors usually need?
Often the same limits as the prime's client contract, commonly $2 million to $5 million. The prime will tell you.
Related Pages
- Hiring subcontractors safely
- Owner operators