Subcontractor Insurance
Working on someone else’s site does not mean you are on their policy. Most subcontractors find that out at claim stage.
- Named is not the same as covered
- Exposure runs through the defects period
- Proof of cover for site access
- Site establishment to final completion
Should a subcontractor have their own insurance?
The gap is rarely obvious at the start of a job. It shows up at claim stage, when the loss adjuster asks for the policy schedule and works out who was actually insured for what.
CivilSure works with main contractors, subcontractors and principals across South Africa. We can look at the subcontract you have signed and help you structure cover around the risk that genuinely sits with you.
Does the main contractor's insurance cover you?
The standard South African arrangement is one project-wide CAR policy taken out by the employer or the main contractor, describing subcontractors as a class. If your firm is not named or described, an insurer may treat you as an uninsured third party.
When you may be included
Cover can extend to you, but only on specific conditions.
- The policy names your firm, or describes "all subcontractors and sub-subcontractors" on the project
- The nature of your work falls inside the described scope
- The liability section names you as an additional insured, which is uncommon without specific negotiation
- The work is done inside the policy period
What it may not cover, even then
The seven gaps that catch subcontractors most often.
- Your own plant, tools, vehicles and equipment
- Defective workmanship itself
- Professional design liability, where you design as well as build
- Injury to your own employees, which sits with COIDA
- Work performed after the main policy has expired
- Claims below the policy excess
- Activities the policy specifically excludes
Ask for this in writing, before you start
- Written confirmation that your firm is included
- The policy period, with start and end dates
- The sums insured and any sub-limits
- The excess, and who carries it
- The exclusions that apply to your trade
- Whether the maintenance or defects period is extended
Why in writing. A verbal assurance from a site agent is not a policy endorsement. If the schedule does not say it, an insurer is not bound by it.
Related reading: CAR policy, should you put your name on it? and What is not covered by a Contractors All Risk policy.
Cover that does not stop at practical completion
Cover needs to run from site establishment to final completion, not from first delivery to handover. That is the whole span of the risk, and the gap at the end is where subcontractors get caught.
- Site establishmentMaterials arrive, liability starts
- ConstructionYour portion of the works
- Practical completionHandover, penalties stop
- Defects liabilityYou return to fix snags
- Final completionObligation ends
What are the three types of subcontractor?
Domestic
The main contractor chose you freely, priced you into their tender and manages you entirely. If a domestic subcontractor fails, that is the main contractor's problem, not the employer's. The everyday kind: most electricians, plumbers and tilers.
Contractor's pick, contractor's riskSelected
The employer, through the professional team, gave the main contractor a shortlist to pick from, or approved their choice for a specialist trade. The main contractor still carries responsibility once you are appointed, but the client had a say.
Joint pick, mostly contractor's riskNominated
The employer, through the principal agent, named your firm specifically and the main contractor had to contract with you. Payments are often certified separately. Risk is shared or limited, because the choice was not the contractor's.
Client's pick, shared riskYour status also shapes how you get paid. A subcontract usually mirrors the main contract, so your money follows the main contractor's payment certificate. That is where pay-when-paid arguments start, and why nominated subcontractors are sometimes paid more directly.
The cover that sits on you
Not every subcontractor needs every one of these. What you need depends on your trade, what you own, whether you design as well as build, and what your subcontract says. This is the shape of it.
What we need to quote you
There is no standard price for subcontractor cover. Two electricians on the same site can carry very different risk, so a premium only means something once we have seen the contract. These are the details that shape it.
- Your subcontract, or its insurance clause
- Ideally
- Contract value and period
- Required
- Site location and type of works
- Required
- Your trade and scope
- Required
- Plant you own or hire in
- If any
Want a feel for how construction premiums are worked out first? Read what contractors all risk insurance actually costs or try the construction insurance pricing tools.
- Public liabilityInjury to other people or damage to their property caused by your work. Commonly the one your subcontract insists on before you get onto site.About this coverRequest a quote
- Contractors All RiskPhysical loss or damage to the works while they are being built. Usually the project policy, but worth your own where you carry the works risk.About this coverStart the CAR quote
- Plant and equipmentYour own machines, tools and hired-in plant, including keys and remotes. Very rarely on the main contractor's policy.About this coverStart the plant quote
- COIDARegistration with the Compensation Fund covers your employees for injury on the job. The Letter of Good Standing is the proof, and it is renewed annually.
- Professional indemnityIf you design as well as install, design liability is not covered by works or liability policies.About this coverRequest a quote
- SASRIARiot, strike, civil commotion and public disorder are excluded from ordinary policies. SASRIA is the state-backed cover for those perils, usually added on top.
- Defects period extensionExtends the works cover past practical completion, through the defects liability period, to final completion.
What is not covered under public liability?
Exclusions differ between insurers and between policies. Read your schedule, and ask us if a wording is unclear. Related: Strict liabilities, who is responsible and Damage to surrounding property.
What you need in hand before you start
Getting the paperwork in order early protects your own programme. Chasing a Letter of Good Standing while a site agent waits at the gate is an expensive way to learn that.
Subcontractor insurance questions
The questions subcontractors ask us most often, answered straight.
Do I need public liability insurance as a subcontractor in South Africa?
Public liability is not required by statute for every business, but subcontract agreements almost always require it, and many sites will not grant access without proof of cover. It responds where your work injures someone else or damages property that is not yours.
How much public liability cover do subcontracts usually ask for?
Limits are set by the contract rather than by law, and construction subcontracts commonly call for cover in the millions rather than the hundreds of thousands. Check the insurance clause in your subcontract, because the required limit is stated there and it varies by employer and by project size.
If I am named on the main contractor's policy, do I still need my own cover?
Usually yes. Being named brings you inside the works cover, but it does not extend to your own plant, your workmanship, your employees, or work done after that policy expires. Insurers also commonly keep rights of subrogation, so they may recover from you if your negligence caused the loss.
What happens if a defect in my work shows up after handover?
Your obligation under the subcontract normally runs through the defects liability period, so you can be called back to fix it. The project policy may already have ended at practical completion unless a maintenance or defects extension was added. That gap is one of the main reasons to look at your own arrangement.
Does my cover need to change depending on whether I am domestic, selected or nominated?
Your status changes who carries the risk under the contract, not what a policy covers. It does affect how much protection you can expect from the main contract and how you are paid, which is worth understanding before you decide how much cover to carry yourself.
What does pay-when-paid mean for a subcontractor?
It is a clause making your payment date conditional on the main contractor being paid by the employer first. In South Africa these clauses are generally enforceable where they are clearly worded. It sits alongside your insurance obligations as one of the two things worth reading closely before you sign.
Can CivilSure arrange cover for a single project rather than a whole year?
Yes, project-specific and annual arrangements are both possible. Which suits you depends on how many contracts you run at once and the values involved. Speak to us with the contract details and we will talk you through the options.
What documents do you need to quote?
Broadly: your subcontract or its insurance clause, the contract value and period, the site location, a description of your trade and works, and a schedule of any plant you own or hire in. The more of that we have up front, the more accurate the quote.
Find out what actually sits with you
Send us your subcontract, or just the insurance clause. We will read it, tell you plainly where the gaps are, and structure cover around the risk that is genuinely yours. No obligation.
