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Loss Control Learning Center

Risk transfer for contractors

As a contractor, it's in your best interest to transfer your risks down to your subcontractors for their negligent acts performed on your behalf. The failure to transfer these risks to an at-fault subcontractor may make you responsible for their negligent acts, expose you to uninsured or underinsured liabilities, and result in higher insurance costs for your business. We provide the following suggestions to assist in your decision making.
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3 steps to creating an effective risk transfer program

Step 1: Understand the basics of risk transfer

Learn how incidents involving subcontractors can lead to lawsuits and understand important provisions of a subcontractor agreement and why it is always best to seek the counsel of a qualified construction attorney.

Step 2: Find a qualified contractor

A subcontractor prequalification process will help you select a contractor who possess the necessary skills, experience, financial stability, insurance and safety qualifications to successfully fulfill your specific project needs.

Step 3: Implement your contractual risk transfer program

Check all the boxes to help ensure that minimum insurance and contractual provisions are met for your project.

Additional resources