There’s no freedom quite like owning your own business. You don’t work for anyone but yourself and you get to make the decisions regarding how much you work and how much you’re paid. However, you’ll also have to hire people. You’re only one person after all and can’t do everything yourself.
If you find that you can’t complete a job with the staff you have on hand, you may need to hire subcontractors. In that situation, you must protect yourself and your clients from accidents and liability. That’s why you’ll need certain things from your subcontractors. Here’s what you should require from your subcontractors.
Qualifications
You need to make sure that the people you’re hiring are qualified to perform the job you’re contracting them for. If you’re a construction contractor hiring subcontractors to do the wiring on the building, you’ll need certificates proving that the people are qualified electricians. You don’t want inexperienced or unqualified subcontractors doing work for you.
Licenses
Some businesses require the business owner to be licensed. This could apply to you and your industry depending on the type of work you’re in. Licenses ensure that businesses are run safely and legally. In construction, for example, the state will often require business owners to register their businesses and procure specialty business licenses. You have to make sure that any subcontractors you hire are properly licensed in the state you reside in.
Insurance
This is the big one. You’ll need to make sure that your subcontractors have their own insurance. This includes worker’s compensation, vehicle insurance, and general liability insurance. As the business owner, it is in your best interest to require your subcontractors to carry their own insurance.
You can require them to show proof of insurance and have it written into any subcontracting contracts. Numerous things can go wrong on any job site and the last thing you want is to be liable for someone else’s mistakes. To prevent this, you can require a harmless indemnity agreement in the contract.
Harmless Indemnity Agreement
Also called a hold harmless clause, a harmless indemnity agreement is a document that removes any legal responsibility for damages or injuries suffered during the course of a project, event, etc. As a contractor, you can require any subcontractor to sign a harmless indemnity agreement, absolving you of any legal responsibility if anything goes wrong with your subcontractor.
This ensures that you won’t be held liable in the event of any accidents caused by your subcontractor. There are enough things to worry about as the owner of a business – don’t let excessive legal liability be one of them.
