“Unlike Books, It’s Okay to Judge a Subcontractor by Its Cover(age)"
In an article for Construction Executive, Brian Richardson discusses how general contractors should create and implement a prequalification program to confirm subcontractors have the proper insurance coverage and are qualified and capable of performing their scope of work on a project. In fact, developing a program that requires proof of compliance with the general contractor’s prequalification program may be required by a general contractor’s commercial general liability (CGL) policy as a precondition to coverage.
Richardson details several steps general contractors should take as part of their vetting process. Specifically, they should require documentation from the subcontractor to ensure compliance, including proof of a signed indemnity agreement, insurance showing the general contractor is listed as an additional insured with the proper language and exclusions in the insured endorsements, the subcontractor is adequately licensed to perform the work as required by law and the subcontractor has the appropriate, agreed-upon insurance coverage.
“Creating and implementing a prequalification program is essential to protect the company in the years to come,” Richardson explains. “Not only does it confirm the subcontractors on a general contractor’s current project comply with the terms of the contract, but it also may be required by the company’s CGL as a precondition to coverage.”
Click here to read the full article.