Sub-Contractors are Great
– what are the Risks?
Tips on contracts, sub-contractors and how they can impact your Insurance.
B
usinesses use subcontractors to
perform tasks on their behalf.
This could be due to needing
extra hands-on-deck, or requiring
extra skills they don’t have. For
example ‘John's Plastering Co’ may
sub-contract ‘Simon's Scaffolders Co’
because they don’t have any qualified
or experienced staff within their
existing team to erect scaffolding. For
John and Simon to conduct business
effectively they s hould have a contract
in place.
A contract makes each party
responsible for elements of the
job. If you don’t know what you’re
responsible for under the contract,
you can’t protect yourself. John
will use a contract to spread some
of the risk to Simon. Simon will
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Women’s Network Magazine
use the contract to work out his
risk and spread what he can to his
Insurance company.
KNOW YOUR RISK UNDER
THE CONTRACT
A contract is just like a tool – and
if you don’t know how to use it you
can be sure of some unexpected
results! This may seem obvious, but
when entering into any contract it’s
vitally important to understand the
contract. You need to understand
your position, what you are expected
to give and what you can expect to get
out of it. Knowing your risk helps you
to set a price for the work and insure
against this risk where you can.
INSURANCE AND RISK
Once you have worked out your
risks under the contract, you need
to work out the potential costs of
these risks and what you can insure
against. This spreads the risk onto
the insurer but is another contract
that you need to understand.
There are several key elements you
should be aware of in an Insurance
Contract;
•
Limits of Insurance Cover
Know how much you are insured for
or can be insured for. If you need
to make a claim, you can only claim
up to the limit you are insured for.
This is one of the reasons it’s so
important that you know what risks