Keeping you in the know

A subcontractor’s insurance certificate doesn’t automatically protect the business that hired them. If you’re asking “what insurance do I need for subcontractors?”, the answer depends on the work, the working relationship and the contract, not just the label used.

It’s understandable to be unsure where your responsibilities begin and end. A subcontractor may be treated as an employee for Employers’ Liability purposes, depending on the arrangement, while contract terms may set out specific cover they must hold. Their policy and yours serve different purposes, so checking a certificate alone may not reveal every gap.

This guide explains the main covers that may be relevant, including Employers’ Liability, public liability and professional indemnity, and how status and contract terms can affect requirements. It also outlines what to verify before work starts, from the type and scope of cover to whether it matches the subcontractor’s tasks. For complex arrangements or construction work with specific contractual demands, tailored insurance advice can help you review potential gaps.

What insurance do I need for subcontractors? Start with the risks

If you’re asking “what insurance do I need for subcontractors?”, first separate your business’s insurance from the cover a subcontractor arranges for themselves. Their policy doesn’t automatically protect your business, and your policy may not cover every risk created by their work.

What you need to check depends on the tasks being carried out, the contract’s insurance requirements and the actual working relationship. Calling someone self-employed does not, by itself, settle whether they may count as an employee for insurance purposes.

For a clear explanation of the relevant Employers’ Liability rules, watch this video:

Which policies may be relevant to subcontracted work?

Consider the exposure created by each task rather than assuming one policy will address every risk:

• Public liability may be relevant if the work could cause injury to a third party or damage someone else’s property.
• Professional indemnity may be worth considering if the subcontractor provides design, advice or other specified professional services. It relates to claims arising from professional work, subject to the policy wording.
• Contract works is a type of cover to review for project works or materials. Check who is responsible for them and whether the policy wording addresses the relevant project exposure.
• Employers’ Liability relates to claims by employees who are injured or become ill because of their work. Whether your business needs it depends on the working relationship and circumstances.

These are covers to assess, not a universal shopping list. Policies can differ in their insured activities, exclusions, limits and definitions. Read the wording and check that the stated work matches the subcontractor’s actual duties and any requirements in your contract.

Does the hiring business need Employers’ Liability insurance?

UK law generally requires employers to have Employers’ Liability insurance, with a legal minimum of £5 million in cover. The Employers' Liability (Compulsory Insurance) Act 1969 is the legislation behind this requirement. Whether a subcontractor counts as an employee depends on the circumstances, so check current official guidance if you’re unsure.

A contract can call someone a subcontractor, but the label alone doesn’t determine their status. The actual working arrangement matters too. Consider how the work is organised and what the relevant insurance policy says. If the position is unclear, seek tailored advice before work begins.

Subcontractor status can change your insurance responsibilities

Calling someone a subcontractor doesn’t settle every insurance question. The agreement, the way the work is organised and the wording of your policies all matter. A contract may describe an independent arrangement, but day-to-day practices could raise different questions about the relationship.

Keep three things distinct: what the contract says, how the engagement works in practice, and how your insurer’s policy defines employees, workers or subcontractors. These distinctions can affect your answer to “what insurance do I need for subcontractors?” and whether a policy reflects the people and activities involved.

What should businesses consider when assessing the relationship?

Review the written agreement alongside the actual working arrangements. Consider how the work is supervised, who controls its delivery and whether the arrangement matches what the contract describes. These are useful prompts, not a definitive legal status test. The circumstances can differ between engagements, even when the same business hires both people.

Construction Industry Scheme (CIS) administration is a separate matter. Handling a subcontractor through CIS does not, by itself, prove their employment status or confirm that insurance cover is in place. Also consider health and safety responsibilities for the work. The HSE guidance on contractors is a useful reference for understanding the roles involved.

How can status uncertainty affect insurance decisions?

If you’re unsure how an arrangement should be treated, check current HMRC and legal guidance, and seek professional advice where needed. Before work starts, explain the arrangement to your broker or insurer and ask how it should be disclosed. Then check the policy wording against the people involved and the activities they’ll carry out.

Don’t assume a subcontractor’s own policy fills any gap in your business’s cover. Your existing policy may not respond to every activity or working arrangement either. Confirm the relevant definitions, insured activities and any conditions with your insurer or broker instead of relying on a job title or payment process.

A careful review can bring the contract, working practices and insurance details into line, while helping identify questions that need a specialist answer. Construction businesses can also review how subcontracting arrangements fit their existing protection through construction insurance advice.

Compare subcontractor insurance by task, exposure, and contract

There isn’t one combination of cover that suits every subcontractor. To decide what insurance do I need for subcontractors, match each person’s actual tasks to the possible exposure, then check what the project contract requires. The examples below are discussion points, not universal insurance requirements.

When might public liability or professional indemnity be relevant?

Public liability is worth discussing where subcontracted work could injure a third party or damage their property. Professional indemnity may be relevant for design, advice or other specified professional services. Don’t rely on a policy name alone: ask the insurer to confirm that the subcontractor’s actual activities are covered, and check the wording for exclusions.

Contracts may specify the evidence of insurance or limits required for a particular project. Check each agreement rather than carrying requirements over from another job. The HSE guidance on using contractors also offers practical context on managing contractor work and responsibilities.

When should you review contract works or tools cover?

First, establish who is responsible under the contract for materials and unfinished work at each stage. Then ask whether tools or hired equipment need separate consideration under the relevant policies. Contract works cover or another policy won’t automatically cover every project loss, so ask the insurer or broker to check the specific wording against the work, responsibilities and contract terms.

Use this checklist to verify subcontractor insurance before work starts

Before a subcontractor begins work, compare the job they’ll do with your contract requirements and the insurance evidence they provide. This practical check can help you identify questions early, but documents alone can’t guarantee that a future claim will be covered.

• 1. Define the work and requirements. Record the subcontractor’s scope, the project contract’s insurance requirements and any stated limits. Requirements can differ by project, so check the terms that apply to this engagement.
• 2. Request current evidence of cover. Ask for an up-to-date certificate or other relevant policy evidence. Check that the named business or individual matches the subcontracting agreement, and note the policy dates.
• 3. Match activities and limits. Compare the work described in the policy evidence with the tasks the subcontractor will actually perform. Check any stated limits against the contract, and ask about exclusions or unclear wording.
• 4. Resolve gaps before work starts. If a certificate doesn’t clarify whether a particular activity is covered, don’t rely on assumptions. Ask the subcontractor to obtain clarification from their insurer or broker, and review your own policy if the arrangement could affect your business cover.
• 5. Keep a dated record and review it. File the agreement, insurance evidence, relevant correspondence and notes of what you checked. Repeat the review at renewal, if the work scope changes, or when new contract terms apply.

What should you check on an insurance certificate?

Check the insured name, policy dates, activities and stated limits against both the subcontracting agreement and the project requirements. A certificate can confirm key details, but it may not answer every question about exclusions or policy definitions. If the wording is unclear, ask the insurer or broker to clarify rather than treating the certificate as a promise that a claim will be paid.

What records should you keep during the engagement?

Keep records together and make each check traceable by date. Alongside the contract and evidence of cover, save written answers to questions about activities or exclusions. Revisit the file when cover renews, duties change or a new project contract sets different requirements. For a broader review of how your own cover relates to subcontracted work, see construction insurance arrangements.

Arrange a joined-up insurance review for your subcontracting work

Once you’ve considered the subcontractor’s role, contract terms and insurance evidence, bring those details together with your own business cover. Asking “what insurance do I need for subcontractors?” is only part of the review. The aim is to understand how your policies and the subcontractor’s cover relate to the work, and where questions remain.

Prepare a clear picture of your activities and risk controls, along with the responsibilities set out in each agreement. Reviewing both sides together can help identify potential gaps or overlaps, but it can’t remove every risk or guarantee how a future claim will be handled.

What information should you prepare for an insurance review?

Gather the documents and details that show what work is being done and who is responsible for it:

• Descriptions of your business activities and each subcontractor’s role.
• Subcontracting agreements, client contract terms and stated insurance requirements.
• Your existing policy schedules and available evidence of subcontractors’ cover.
• Relevant risk controls, plus changes to work scope, materials, project responsibilities or workforce arrangements.

Having these details to hand gives an adviser a practical basis to consider your circumstances rather than assessing policies in isolation.

When is specialist broker advice useful?

Consider speaking with an adviser if policy wording or contract requirements are unclear, if a subcontractor’s status raises questions, or if a change in work could affect your existing cover. Construction work can involve several parties and responsibilities, so explain the actual tasks and arrangements, not only the job title or contract label.

Paterson Insurance Brokers is an independent UK brokerage with over 25 years of industry experience, specialising in construction insurance and risk management advice for businesses. An insurance review can consider your activities, contracts, current policies and risk controls, and help identify potential gaps without assuming that a particular policy is right for every business.

For a practical reference while reviewing your cover, see construction insurance guidance from Paterson.

Make your next subcontracting decision with confidence

The right insurance approach starts with your business’s activities, the subcontractor’s role and the terms of the project. If you’re still asking “what insurance do I need for subcontractors?”, consider cover across both your business and the subcontractor, and check status and policy wording rather than making assumptions.

Before work begins, make sure the insurance evidence matches the agreed tasks and requirements. Keep your records current, and revisit them if responsibilities, work scopes or contracts change. Where the position is unclear, a tailored review can help you identify questions to raise and potential gaps to consider.

Paterson Insurance Brokers is an independent UK brokerage with over 25 years of industry experience in construction insurance and risk management advice. To discuss how your contracts, activities and existing cover fit together, contact Paterson Insurance Brokers about your construction insurance requirements.

A careful review is a practical next step towards managing subcontracting risks with greater clarity.

Frequently Asked Questions

Do I legally need insurance for subcontractors?

Not automatically. Whether insurance is legally required depends on your business relationship with the worker, applicable UK rules and contract terms. Your business’s obligations are separate from any cover the subcontractor arranges for their own work. Their policy doesn’t settle your responsibilities. Check current official guidance, particularly if the person’s status is unclear, and seek insurance or legal advice based on the actual arrangement.

Should subcontractors have their own public liability insurance?

A hiring business may request evidence of public liability insurance if the contract requires it or the project’s risks make it appropriate to discuss. A certificate alone doesn’t show that every activity or claim is covered. Check that the insured party matches the agreement, the policy dates are current, and the stated activities and limits meet the contract requirements. Ask the insurer or broker about unclear wording or exclusions.

Does a subcontractor need Employers' Liability insurance?

It depends on the subcontractor’s actual status and circumstances, not simply on the word “subcontractor” in an agreement. Employers’ Liability requirements relate to the employment relationship, so don’t assume the label answers the question. Check current official UK guidance, and speak with an insurance or legal adviser if the working arrangement is uncertain. The hiring business should also review how its own policy treats the people it engages.

Can I rely on a subcontractor's insurance instead of my own?

No. You shouldn’t assume another party’s policy protects your business. The response to a claim depends on who is insured, the policy wording, covered activities, limits and the circumstances of the claim. Review your own policies and the project contract alongside the subcontractor’s evidence. If responsibilities or policy terms are unclear, ask your insurer or broker to explain how the arrangement should be disclosed and considered.

What insurance should a construction subcontractor consider?

There isn’t a universal package. If you’re asking what insurance do I need for subcontractors, consider each trade, service, contractual duty and exposure. Public liability may be worth discussing for possible third-party injury or property damage; professional indemnity may be relevant to design or advice. Project-related cover may also merit review. Check the contract and policy wording with an insurer or broker before treating any cover as suitable.

How do I check a subcontractor's insurance certificate?

Match the insured name to the subcontracting agreement, then check the policy dates, covered activities and stated limits against the contract. A certificate may not resolve questions about exclusions or detailed wording, so ask the insurer or broker to clarify anything uncertain. Keep a dated record of the evidence and checks. Revisit them if the policy renews, the work changes or project requirements are updated.

Does CIS status prove that a subcontractor is self-employed?

No. CIS administration by itself doesn’t prove a subcontractor’s employment status or confirm that insurance cover is in place. The working relationship and its circumstances also matter, and status questions may need more than a review of payment arrangements. Check current HMRC guidance for tax-status questions. If you’re unsure how the arrangement affects insurance, explain it to your insurer or broker and confirm what your policy requires.