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Subcontracting can create risks for your company. Here’s what you need to know!

Subcontracting can be an appealing option for business owners, especially when you have too much work to do or you need to call in an expert.

If you subcontract work, you and your company could be held liable for any damages caused by negligence on the part of your subcontractor, employees of your subcontractor, or anyone they subcontract the work to themselves.

Here are a few tips to reduce the risk involved in subcontracting for your business.

Ask the subcontractor for an certificate of insurance.

  • Require proof of civil liability insurance (and professional liability insurance if applicable) from the subcontractor.
  • The certificate of insurance should come directly from the insurance company and confirm that:
    • the subcontractor is currently covered
    • the subcontractor will continue to be covered throughout the entire contract period
  • The amount of coverage should be at least the same amount you’ve taken out for your own business ($2 million is the recommended minimum).

Choose subcontractors based on their expertise and experience.

  • There are 2 main factors to consider:
    • Expertise: A reliable and professional subcontractor shouldn’t have any problem discussing their skills and technical knowledge with you.
    • Experience: Ask for references. Subcontractors who do good work will readily furnish contact information of satisfied clients.
  • If applicable, get copies of any legal or professional licenses required (e.g., Régie du bâtiment du Québec, Corporation des maîtres électriciens du Québec) and applicable permits (construction, environment, etc.).

Be clear with and keep a close eye on your subcontractors.

Give clear instructions to your subcontractor for the work you want them to do. Don’t forget that you are always completely liable. If your subtractor, their employees or anyone they subcontract the work to themselves causes damages, you may have to foot the bill.

  • Inform the subcontractor of the areas they may access and clearly indicate any off-limits areas. If needed, ask one of your employees to escort the subcontractor around the premises or to be around while they work.
  • Require subcontractors to wear a “Visitor” ID card at all times, and ask them to specify when they’ll be arriving and leaving. This will make it easier for your employees to identify external and/or unauthorized people.
  • Never assume your subcontractor knows the risks of the work they’ve taken on, or that they will take the necessary precautions.
    • Tell your subcontractors the mandatory security and safety rules and any safeguards they need to put in place for the work they are doing.
  • Inform your subcontractor of any dangerous conditions they’ll be exposed to during their work (e.g., heavy vehicles, vapours, flammable liquids or nearby combustible materials).

Make a list of pre-approved subcontractors.

  • Make a list of subcontractors who have passed your screening process and keep it up to date.
    • For example, if a pipe bursts at 3:00 a.m., you won’t have to search the Internet in the middle of the night for a good plumber offering 24-hour emergency service.
  • Make this list available to your staff so they can call in reliable people if there’s ever an emergency when you’re not around.

Check out our other prevention fact sheets:

Get peace of mind with a business continuity plan

43% of businesses faced with a major crisis don’t recover. To avoid this situation, make sure to have a business continuity plan.

Take action with an emergency response plan

An emergency response plan can protect your business against the threat of an emergency situation to its survival.

Want to learn more?

See our complete list of prevention fact sheets.

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