The tiler's contractor drills through the underfloor heating, the mechanical subcontractor leaves a riser open, the scaffolding crew scratches the glass façade – damage caused by a subcontractor is an everyday event on multi-party projects. The question then splits in two: who stands behind the injured party, and whose cover ends up paying?
- Towards the client, it's typically the main contractor who stands behind its subcontractor's mistakes too.
- Which policy pays depends on who's insured: an included subcontractor's loss is settled within the CAR policy.
- Towards a subcontractor who isn't included, the insurer can pursue recourse.
- The internal settlement between the parties is a matter for the subcontract – sorting it out in advance is cheaper.
Which way does liability run?
Under the logic of the contractual chain, the client has a legal relationship with the main contractor – and the main contractor typically answers for its subcontractor's work as if it had carried it out itself. So the client doesn't pursue the subcontractor, but the main contractor; how the main contractor and the subcontractor then settle up between themselves is a matter for their own contracts and cover. That's why it matters what the insurance clauses in the subcontract actually say.
Which policy does the work?
There are three scenarios. One: the subcontractor is included among the insured parties under the project CAR policy – in that case, loss it causes to the works is a property-section matter, loss it causes to third parties is a liability-section matter, and the question is settled within the one policy: that's exactly why bringing in the chain pays off. Two: the subcontractor is outside the policy – the CAR policy can pay the injured party, but the insurer may then pursue recourse against the party at fault, whose own liability insurance is then their safety net. Three: the loss falls outside the scope of the CAR policy (e.g. the subcontractor's own machine) – there, it's that party's own cover that does the work from the outset.
How it works in practice
At claim time, the routine is the same as always – loss mitigation, documentation, notification via the insurer's line (the process) – plus one extra layer: identifying who's at fault and establishing the picture of liability. This is where the site diary, site-handover records and the site manager's notes settle it: who worked where, and when. On an undocumented project, a subcontractor's loss quickly becomes everyone's and no one's problem: the documentation article.
Sorting it out in advance is cheaper
Main-contractor self-protection has three elements: bringing the chain into the CAR policy (or a conscious decision to leave it out), consistent insurance clauses across the subcontracts (what the subcontractor has to bring, what the project policy covers), and evidencing the subcontractor's own liability insurance where it's warranted: the chain checklist. From the subcontractor's side, the same logic reads in reverse – and one piece of advice: ask the "am I included in the policy?" question before work starts, not after a loss.
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