7 Red Flags When Hiring Subcontractors. Don’t Ignore These Warning Signs.

Part 2: 7 Red Flags When Hiring Subcontractors. Don’t Ignore These Warning Signs.

Even the most promising subcontractor on paper can turn into a costly liability if warning signs are overlooked. In Part 1, we covered the importance of vetting and prequalifying subs. Now, let’s break down the red flags that should raise concern before you bring anyone on-site.

⚠️ 1. Incomplete or Expired Insurance Certificates

A subcontractor without up-to-date insurance is a serious risk. If a worker is injured or property is damaged and uninsured, your company may be liable, even if it wasn’t your fault.

⚠️ 2. Hesitation to Sign Standard Contracts

If a subcontractor pushes back on clauses related to insurance, liability, or safety compliance, it may signal future disputes or noncompliance. A reluctance to agree on legal responsibilities is a red flag.

⚠️ 3. Poor Safety Record

Subcontractors with multiple OSHA violations, a high Experience Modification Rate (EMR), or a history of job site injuries are likely to repeat those issues, putting your project and reputation at risk.

⚠️ 4. Unverifiable Licenses or Credentials

If you can’t easily verify a subcontractor’s license or industry certifications, proceed with caution. Hiring unlicensed workers can lead to project shutdowns or legal penalties.

⚠️ 5. Vague References or Limited Work History

A lack of strong references, vague responses about past work, or no clear project portfolio may indicate a subcontractor who lacks experience or is hiding something.

⚠️ 6. Signs of Financial Instability

Missed deadlines, frequent labor turnover, or signs of underbidding can reflect underlying financial trouble. A subcontractor in distress can’t deliver on quality or reliability.

⚠️ 7. Lack of Communication or Accountability

If communication is slow during the vetting process, expect the same on the job. Delays in paperwork, unanswered emails, or last-minute changes are early signs of misalignment and disorganization.

What To Do When You Spot a Red Flag?

• Don’t ignore it — document and address the concern directly.

• Ask questions — give the subcontractor a chance to explain or clarify.

• Consider alternatives — have a shortlist of qualified backups.

• Loop in your insurance advisor — they can help assess the risk exposure of hiring a questionable subcontractor.

  
  

📌 Next in the Series: Building a Subcontractor Compliance Program That Works. 

In Part 3, we’ll explore how to build a proactive system that helps construction companies track subcontractor compliance with ease.

Need help evaluating your subcontractor risk exposure? 

Talk to an expert at Coastline Risk today and get custom support for building a safer subcontractor network. 👉 Let’s Talk Coverage

Get a Quote: https://www.coastlinerisk.com/get-a-quote

Contact Us Today: (617) 500-1824. / info@coastlinerisk.com

Protect your business, your team, and your projects with CoastlineRisk. We're here to help you navigate the complexities of the insurance industry and secure the coverage you need to succeed. 

Learn more At Coastlinerisk.com