Main contract cover rarely stretches as far as subcontractors assume. This page walks through what a project policy usually does and does not reach, what tends to sit with you, and what your subcontract decides. What any cover actually does is set out in its own wording, and all cover is subject to underwriting.
Send us your subcontract, or just the insurance clause, and we will go through it with you. WhatsApp 082 733 0192.
Subject to Your subcontract and the policy terms
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.
The standard South African arrangement is one project-wide 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.
Cover can extend to you, but only on specific conditions.
The seven gaps that catch subcontractors most often.
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.
Where the subcontract holds you liable through the defects period, the exposure runs from site establishment to rather than from first delivery to handover. Whether your cover needs to span that depends on what your subcontract says. The gap at the end is where subcontractors get caught.
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.
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.
The employer, through the principal agent, named your firm specifically and the main contractor had to contract with you. Payments are often certified separately. Because the employer made the choice, the contract may give the main contractor some relief. Responsibility is not automatically transferred, and your subcontract decides it.
Your status also shapes how you get paid. A subcontract usually mirrors the main contract, so your money follows the main contractor's . That is where pay-when-paid arguments start, and why nominated subcontractors are sometimes paid more directly.
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.
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.
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.
This is a plain language summary of the covers subcontractors commonly arrange, not a description of any policy you hold or may be offered. Each cover answers only on the terms, limits, excesses and exclusions in its own wording, and all cover is subject to underwriting. Send us your subcontract and your schedules and we will go through what actually applies to you.
Exclusions differ between insurers and between policies. Read your schedule, and ask us if a wording is unclear. See our website disclaimer. Related: Strict liabilities, who is responsible and Damage to surrounding property.
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.
The questions subcontractors ask us most often, answered straight.
Public liability is not required by statute for every business, but most subcontracts we see require it, and many sites will not grant access without proof of cover. It answers what you are legally liable to pay, up to your policy limit, where your work injures someone else or damages property that is not yours.
Limits are set by the contract, not by law. In South African construction subcontracts the required public liability limit is commonly in the R5 million to R10 million range, though we see both lower and higher depending on the employer, the project value and the site. The limit that applies to you is the one stated in the insurance clause of your subcontract.
Being named brings you inside the works cover, but it does not usually 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. Whether that leaves a gap worth covering depends on your subcontract and what you own, which is what we work through with you.
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.
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.
It is a clause making your payment date conditional on the main contractor being paid by the employer first. South African courts have generally upheld clearly worded pay-when-paid clauses, but enforceability turns on the exact wording. That is a legal question rather than an insurance one, so take legal advice on your own subcontract.
Both project-specific and annual arrangements are available in the market, subject to insurer appetite and underwriting. 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.
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.
Send us your subcontract, or just the insurance clause. We will go through it with you, point out the gaps we can see, and look at how to structure cover around the risk that sits with you. Cover is subject to underwriting. No obligation.
