Subcontractor's insurance

From what I understand, the GC should be able to add them to their additionally insured. Did you not give your GC the alteration agreement before hiring them?

Bumping this up after the spam.

Yes, I did. And they were OK with it. Now the building is scrutinizing their policy and finding some exclusions unacceptable, including the subcontractor coverage issue. Hope they can work it out soon.

Yikes! I hope so, too. That would really be annoying after having selected the GC. May I ask what specifically they found to be the issue?

That their policy don't cover the subcontractors, even though the GC requires the subs the carry their own insurance. Also a couple of other exclusions.

Many contractors will withhold the fact that they subcontract out some work. They even go as far as to say they are just a painting company. Those contractors only pay about 5k a year in insurance. I paid over 100k in insurance last year as I have what is called Contractural liability, meaning that whoever I hire they are covered under me as long as I have their insurance and subcontractors agreements. It is something to be worried about if you hire a general contractor who does not have the correct insurance you will not be covered if something happens. Some contractors will provide you with the plumbers and electricians insurance directly but if something happens you still can have serious problems

Our GC's insurance covers every employee of his company, but I think all actual work are done by subcontractors (carpenter, electrician, plumber). The GC requires the subs to all have insurance, and have all the policies on file.

I just went back to take a look, and the GC's cost in General Liability is about 25k, and Excess Liability is about 20K. However his carpenter's "contractor special policy" only has a 1k premium.

I'm concerned that if the cost to bring the policy up to the building's requirement is very high (which is likely given primer's number), the GC would balk and we would lose at least part of our initial deposit.

Our GC did not include subcontractors under his insurance because each subcontractor had his own insurance.

Jelj13, thanks for the input. In your case, did the building request and review the policies of each subcontractor?

FireDragon,

Your contractor would have to give you back your deposit. How do you know how much your contractor's insurance costs?

Jelj13, if you paid your contractor directly and he paid the subs you would have a hard time getting any money if there was a problem. The GC's insurance would not pay and the sub's insurance would blame the GC. That's why its important that the contractor have contractual liability. Many of the smaller guys do not have it but they should

I'm not sure. The contract says that if the building doesn't approve the work scope then part of the deposit will be applied towards administrative costs, the rest refunded. Also there is a time limit that has already passed. I can argue this is different because they had seen the insurance requirement and said they can meet it, but they've also done some design, shopping, and probing.

This is not a very small guy. I'd say they do 10+ projects a year. I'm surprised that none of the other buildings required this coverage before. I saw the premium figures on their insurance policy.

Primer, would you say this contractual liability is a major line item in your 100k+ insurance cost? Does it take into account how many subs you hire/how many projects you do? Does it help if all of your subs are insured? Just trying to figure out whether this can be worked out.

I'm lost here. Can't the GC just press his subs to get you workman's comp and liability insurance as needed to make the building happy, and then pass through the insurance costs to you as part of the renovation? That shouldn't be a big enough number to tank the project, right? Primer would have a better sense than I would, but I think we're talking maybe a couple of thousand ... not minimal, but not the kind of line item that should derail a full reno, either.

No, I think the GC's own insurance needs to change to cover the subs, and it's not just a couple of K. More like ten times that if not more. Still waiting for the GC to find out.

Most buildings are fine as long as the GC has his own insurance and the plumber and electrician has their own insurance. There are some buildings that require the contractor to have contractual liability but not many. Fire dragon , do you live in the 50's by chance? There is one building that will not budge on it. The contractual liability is a huge reason why my insurance is so high. My insurance goes up according to how much I pay my subs. At the beginning of the year they ask me how much I think I will pay the subs. If I go over that amount I get killed when I get audited. Last year I had to pay an additional 40k. If it's lower I do not get any money back. All my subs have to be insured or I get hit for more money. A lot more money. We have a program we use that alerts us every time a subs insurance is about to expire. We also need to have our subs fill out paperwork for our insurance company. This goes for anyone we hire not just the plumber and the electrician.

Your contractor needs to step up and get the proper insurance or give you the money back. I have the insurance I have now because the same thing happened to me so I switched insurance immediately so I could do my clients project.

This is in the GV and I don't think the building will budge either. I think the GC is looking at getting extra coverage, but I haven't heard anything concrete yet and worry about how much more it'll be.

Primer, in your case did you find out the insurance requirement before or after signing the contract with the client? Did you pass on the cost to that client or did you just consider the cost of doing business? And did you keep this coverage after the project is done? Thanks a lot!

I did not pass it on. I decided it would be better to have the better insurance. I have stayed with the new insurance. I did find out after signing the contract.