When Things Go Wrong - Handling Claims Involving Subcontractors.
- jboynton96
- Jun 23
- 2 min read
Part 4: When Things Go Wrong — Handling Claims Involving Subcontractors.
Even with solid vetting and compliance practices in place, things can (and do) go wrong. When a claim involves a subcontractor, whether it's an injury, property damage, or a lawsuit, being prepared makes the difference between a manageable situation and a financial nightmare.
⚠️ Common Claim Scenarios Involving Subcontractors
Understanding the most frequent types of claims can help you proactively prepare for them:
Jobsite Injuries: A subcontractor's employee is injured on your site. Whose workers’ comp applies?
Property Damage: A subcontractor damages the surrounding property or installed work.
Defective Work: Faulty workmanship results in additional costs or legal action from clients.
Third-Party Lawsuits: Injuries or damages affecting someone outside the project (e.g., a passerby or neighboring business).
How to Handle These Claims Effectively
1. Act quickly, but Strategically: Notify all relevant parties immediately—your insurance provider, legal team, and the subcontractor involved. Quick reporting helps preserve evidence and streamline claims handling.
2. Gather Documentation: Secure jobsite reports, photos, witness statements, and copies of subcontractor agreements. Documentation is your strongest defense if disputes arise.
3. Review Insurance Policies: Check that your subcontractor carried the required insurance and named your company as an additional insured. This can shift liability and defense costs off your plate.
4. Activate the Contract: Your subcontractor agreement should clearly outline indemnification and who is responsible in the event of a claim. Don’t wait until something goes wrong to find out your contracts are too vague.
5. Communicate Clearly: Be transparent with your internal team and your client. Mismanaged expectations during a claim can hurt relationships, even if you're not at fault.
Risk Management Takeaway
Claims are inevitable in the construction world. The key is planning with solid contracts, insurance layers, and fast response protocols. When everyone knows their role, you minimize downtime, protect your reputation, and keep projects moving.
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