Do subcontractors need their own insurance?

Knowing whether subcontractors need their own insurance can be confusing. Whether working in construction, roofing, plumbing, electrical work or specialist trades, many subcontractors might assume if they’re working for another contractor they’re covered by their trades insurance policy.

In reality, this assumption can leave you seriously exposed.

Not having your own insurance could make you liable if something goes wrong or leave you in breach of contract.

Here we’ll go into more detail about if subcontractor needs their own cover, what cover they should consider and a few tips for the main contractors hiring them.

*Disclaimer – This guide provides general information about insurance. Cover, limits, conditions and exclusions vary between policies and providers. Always check your policy wording and schedule for full details.

Should subcontractors have their own insurance – quick answer

In most cases, yes – many subcontractors may need to have (or at least consider) trades insurance. Not having it could prevent you from working, make you in breach of contract or worse, leave you liable if something goes wrong.

Whether or not you need your own cover as a subcontractor comes down to a few things, including (but not limited to):

• Are you a bona fide subcontractor or labour-only subcontractor?
  Bona fide subcontractors vs labour-only subcontractors will face different expectations when it comes to if they need to hold (or would benefit from) their own insurance. We’ll cover this a bit more below.
• Does your contract or the contractor hiring you require you to hold your own insurance?
  Many contractors require proof of insurance when hiring subcontractors before allowing them on site. It may also be their client has requested these insurance conditions in the contract.
• Do you use your own tools and equipment for your jobs?
  Most tools insurance will only cover the tools and equipment the policy holder owns. So, your main contractor’s policy likely won’t cover your gear. If you use your own tools on site, or get angsty about them being stolen or damaged, having your own tools cover could be a good idea.

Labour-only vs bona fide subcontractors

Whether you need your own insurance or what insurance you need will often come down to how you work. This is where the distinction between labour‑only and bona fide subcontractors becomes critical.

The category you fall into can determine if you might be covered by the insurance of the contractor who hired you, or if you should consider your own trades policy.

What is a labour-only subcontractor?

Labour-only subcontractors are what they sound like – labour only. They normally:

• Work under the main contractor’s day‑to‑day supervision
• Follow set hours and instructions
• Use tools, materials and equipment supplied by the contractor (not their own)

From a legal and insurance perspective, labour‑only subcontractors are usually treated as employees, even if they’re self‑employed for tax purposes.

What that means for insurance

They’re commonly covered by their hirer’s employers’ liability. They may also be covered under other parts of their policy where the insurer explicitly extends liability to cover employees.

However, this only applies if the working relationship genuinely reflects labour‑only status. Simply being paid under CIS or working under supervision doesn’t automatically remove responsibility from the subcontractor.

You should always check with the main contractor or their insurer for exact coverage details when it comes to subcontractors.

What is a bona fide subcontractor?

A bona fide subcontractor is someone who’s genuinely self-employed. They normally:

• Run their own business
• Work independently with control over how they complete work
• Supply their own tools, equipment and materials
• Can hire others or send a substitute

Bona fide contractors are typically considered a business in their own right. They carry the responsibilities and liabilities that come with that – like the quality of their work or negligence, errors or third-party damage or injury.

What that means for insurance?

They’ll normally need to hold their own insurance as many contractors’ policies won’t automatically cover bona fide subcontractors unless explicitly stated. This particularly applies to public liability or employers’ liability if they employ anyone.

Although, even where subcontractors hold their own insurance, the main contractor may still retain some liability depending on contract terms and supervision.

What insurance do subcontractors need?

The only insurance a subcontractor may legally need is employers’ liability if they’re bona fide and employ anyone. Aside from that, the best way to know what insurance you “need”, will be to look at your contract. If there’s any cover you’re required to hold to work on a project, it’ll be in there.

There may also be other policies you’d benefit from, even if you don’t legally or contractually need to hold them.

For the most part, common policies subcontractors take out are:

• Public liability – can cover repair costs, compensation and professional fees when your actions cause third-party injury or property damage.
• Professional indemnity – can protect against claims of financial loss caused by your professional negligence while providing design services, professional advice or consultancy.
• Employers’ liability – a legal requirement for most businesses that employ staff, unless an exemption applies. It can cover legal and compensation costs for claims from employees who are injured or get ill due to their work.
• Tools insurance – can cover the cost to repair or replace tools that are stolen or damaged following fire or theft (with signs of forced entry) – normally covers hand tools and power tools like drills, hammers, sanders and saws.

There are plenty of other types of policies subcontractors may want to consider. For a full overview, check out our guide on what insurance a tradesman needs.

Why they might need their own insurance

Insurance can be a subjective thing and really it’s up to you to know if you need it or would benefit from the coverage. Reasons why a subcontractor might need it are:

• They’re contractually required to hold it
• They legally need it (i.e. employers’ liability)
• They use their own tools and equipment

Without the right coverage, you could be left footing the bill if someone claims against you for negligence, property damage, third-party injury or even if your tools are stolen.

Best practices for choosing subcontractor insurance

Insurance can be a bit of a minefield – you’re an expert in your graft, not policies. So, we’ve put together a few tips to help you find the right coverage for your trade:

• Always check contract terms before shopping for insurance. This will tell you what you need to hold to work on a project.
• Look for a policy that offers flexible cover limits – a common contractual requirement is £1m public liability but larger commercial clients may ask for up to £10m.
• Consider additional cover if your trade has extra risks, like working with plant machinery or in-progress projects vulnerable to delays caused by damage.
• Check policy exclusions or conditions, these will tell you what you won’t be covered for or what you need to be doing for a claim to be considered (e.g. security conditions, safety measures).

Tips for contractors hiring subcontractors

If you’re a contractor wondering if you should ask your subcontractors to have their own liability insurance, we have a few tips to keep in mind:

• Always verify subcontractor insurance certificates and indemnity limits before allowing them to start on the job
• Be aware you could still be held partly liable if you hire uninsured subcontractors – clients could claim for your negligence
• Check for liability clauses in your contracts – these often transfer risk to you as the main contractor for the actions/negligence of those you hire
• Check with your insurer if your policy may extend to cover your subcontractors

Insurance with Kingsbridge

At Kingsbridge, we offer our own combined Trades Insurance policy, including Public Liability, Goods & Tools cover and optional Employers’ Liability (where required). Plus, you can tailor it with optional add-ons like Hired in Plant, Owned Plant, Contract Works, Professional Indemnity (claims-made basis), so you get the cover you need under one policy.

Our cover can also offer perks like:

• Up to £2,500 Goods & Tools cover included as standard
• Cover for tools stolen from a secured van overnight (with signs of forced entry)
• Nil or low excess available for some trades (will be noted in your policy schedule)
• Real support from in-house dedicated experts
• No hidden fees

If you hire subcontractors, speak to our team and they can talk you through how we may be able to cover them (and you).

Or, if you’re a subcontractor, you can get straight to getting a quote - contact us and speak to our in-house experts who can help you get the right policy for your trade.

Subcontractor insurance FAQs

Are subcontractors covered by public liability insurance?

A subcontractor can be covered for public liability if they hold their own policy or if their main contractor’s policy explicitly extends coverage to subcontractors.

In most cases, public liability policies only cover the named policy holder and their direct activities, so they won’t normally be automatically covered by a main contractor’s public liability insurance.

Always check with the insurer for exact details and T&Cs.

Do CIS subcontractors need their own insurance?

Yes, CIS (Construction Industry Scheme) subcontractors still need their own insurance if they want to protect against risks but aren’t covered by their main contractor’s insurance.
CIS status relates to how tax is paid, not to insurance or liability.

What’s the difference between contractors and subcontractors?

A contractor is the main person or business responsible for a project. They usually have the agreement with the client (whether direct or through a recruiter), oversee the work, manage timelines, and hire other trades to complete specialist tasks.

A subcontractor is hired by the contractor to carry out specific parts of the job, like electrical work, plumbing, or plastering.

Is employers’ liability insurance required for subcontractors?

Employers’ liability insurance is legally required if a subcontractor employs other workers, including labourers or apprentices – even on a temporary basis.

Can a contractor insist a subcontractor has insurance?

Yes. Many contractors require subcontractors to provide proof of insurance before starting work. This is common on commercial sites and larger domestic projects.

What happens if a subcontractor works without insurance?

If something goes wrong, the subcontractor may be held liable for:

• Injury claims
• Property damage
• Legal costs
• Compensation

This can result in significant financial loss or legal action.

Is subcontractor insurance expensive?

Insurance costs are generally affordable, especially compared to the risk of an uninsured claim. Prices depend on trade, turnover, and level of cover, but a rule of thumb is the bigger the risks you face and the more comprehensive your insurance, the higher the premium.

Are main contractors liable for their subcontractors?

Main contractors can be held liable for the actions of their subcontractors, depending on the circumstances. While subcontractors are usually responsible for their own work, especially as independent businesses, main contractors may still be liable if they:

• Failed to properly supervise the work
• Hired an incompetent or unsuitable subcontractor
• Breached health and safety obligations on site
• Agreed to an indemnity clause in the contract with the client

In practice, liability often depends on who had control over the work and what the contract terms say. This is why clear contracts and adequate insurance on both sides can be essential.

Do contractors need employers’ liability insurance if they only use subcontractors?

It depends on the working arrangement. Employers’ liability insurance is legally required if the contractor employs anyone. If all workers are genuine, self‑employed subcontractors who control how and when they work, employers’ liability insurance may not be required.

However, if subcontractors work under the contractor’s direction in a way similar to employees, they may legally be classed as employees – even if labelled as subcontractors. In that case, employers’ liability insurance would likely be required.

What happens if a contractor hires an uninsured subcontractor?

If a contractor hires an uninsured subcontractor, it can create serious risks. If injury or damage occurs, the contractor could:

• Face legal or financial claims
• Be pursued through their own insurance policy
• Be found partially or fully liable for losses

In some cases, clients may sue for negligence if a contractor hires an uninsured subcontractor even though the contract stipulates insurance is required. That’s why many contractors insist on proof of insurance before allowing subcontractors on site.

What insurance does a subcontractor legally need?

One of main policy types that is legally required is employers’ liability insurance – required if you employ staff, even part time or family members, with a minimum of £5 million cover.

Other covers, like professional indemnity or public liability, aren’t required by law but might be contractually required by clients.