The Federation of Master Builders

Subcontractors – Who Do I Need To Insure?

Published date: 17 September 2020

This is a common question for builders and those managing other workers. To ensure your site remains safe, you need to check everyone working there is adhering to health & safety regulations and that the correct insurance is in place on both sides. You could be held accountable if an accident occurs, even if it was not your fault. 

Here we give guidance on the difference between the two types of subcontractors and what you need to check and put in place before either start work on your site: 

Bona Fide Subcontractors (BFSC) - are generally deemed to be contractors that work without direction from you. As long as they are not working under your control, they have their own legal liabilities and a responsibility to insure themselves. In this instance there is no need to include them in your count of employees. A true BFSC will provide their own tools and materials, be responsible for their own Health & Safety, meaning they should have their own Liability Insurance in place and will typically be paid by invoice for a job as opposed to an hourly rate. They will work independently, without supervision and set their own hours. They are generally self employed such as plumbers or electricians. 

Site managers should always check that any BFSC working on their site has their own insurance in place and that it is up to date. You should also regularly review their schedule to ensure the correct levels of cover are determined. Ideally the level of cover should match your own policy requirements. 

If a BFSC does not have their own Liability Insurance in place, then you could be held responsible if an incident occurs whilst they are working on your site. Always ask for proof of their certificate. 

Labour Only Subcontractors (LOSC)  are legally considered as employees and should be treated as employees for the purpose of insurance cover. Generally, they work under your direction and supervision but only on a temporary basis rather than permanent. They do not provide their own tools or materials. You determine the hours they work and direct where and how they work. This means that you are responsible for insuring them under your own Liability Insurance Policy. 

Even if you only have one employee working for you, you are required by law to have Employers Liability Insurance. If an incident occurs or if they suffer a work-related illness, such as asbestosis or hearing loss, and they are not covered, you may be held liable 

Always check with your insurance company that you have the right levels of cover in place for the correct number of people. 

If you have any questions regarding subcontractor’s insurance or require further information about any of our other policies, please call our friendly team, who will be happy to help on 01353 652760

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