Look out!

Do not rely on nonstandard insurance policies

Roofing contractors increasingly are using subcontractors and expanding the scope of subcontracted work for a variety of reasons, including manpower shortages, competitive cost considerations and construction deadlines.

However, subcontractors hired by roofing contractors often are small, undercapitalized and may lack adequate insurance. If you hire a subcontractor that does not maintain adequate insurance, your insurance policy may need to cover a claim that was caused by your subcontractor, or your company may have to pay all or part of a loss because your subcontractor's insurance was inadequate. You might also be in breach of your upstream contract with an owner or general contractor if your subcontractor does not satisfy contractual insurance requirements.

Insurance requirements

The first step to protecting yourself is to be sure you have a signed, comprehensive written subcontract with every subcontractor you retain. The subcontract should identify each insurance policy the subcontractor is to maintain and minimum coverage limits. At a minimum, you should require commercial general liability (CGL), workers' compensation, automobile liability, umbrella liability and pollution liability coverages. The limits should be at least equal to what you are required to maintain for the project.