In this guide
Does PI Insurance Cover Subcontractor Mistakes?
If you use subcontractors, you might assume that any mistakes they make are automatically covered by your professional indemnity (PI) policy. The reality is more complicated. PI cover can protect you against claims arising from subcontracted work, but only if your policy is structured correctly.
How Liability Works With Subcontractors
When you hire a subcontractor, you remain responsible for the overall service delivered to the client. If something goes wrong, the client is likely to pursue you, not the subcontractor directly. That means your PI policy needs to reflect the fact that you use subcontractors.
Some policies include subcontracted work as standard, but others exclude it unless specifically agreed with the insurer. Always check your schedule and wording carefully.
Author Note: If you are unsure, speak to your broker. If you do not have a broker yet, submit the form below to get free advice from a specialist.
Checking Your Subcontractors’ Insurance
Even if your own PI covers subcontractors, insurers often expect those subcontractors to hold their own valid PI insurance. You may need to:
- Request proof of cover before engaging them
- Keep records of their insurance certificates
- Ensure their limits of indemnity are proportionate to the size of the work
If your subcontractor’s insurance lapses, and you didn’t check, your own insurer may take issue with a claim.
Why Cover Gaps Can Be Risky
Imagine you’re a surveyor and hire a subcontractor to assist with a valuation. If they make a mistake, the client may still pursue you. Unless your PI policy specifically covers subcontractors, your claim could be declined.
This is particularly relevant for high-risk professions. For example, see our pages on Surveyors Insurance and Architects PI Insurance for guidance on how subcontracted work can affect liability.
What to Ask Your Broker
To make sure you’re protected, ask your broker:
- Does my PI policy extend to subcontracted work?
- Do I need to notify you each time I use subcontractors?
- What documentation should I keep on file?
These questions will help you understand whether your current cover is adequate or whether you need policy adjustments.
Final Thoughts
PI insurance can cover subcontractor mistakes, but only if your policy is worded correctly and your subcontractors hold their own valid insurance. Don’t assume you’re automatically protected, check the details before a problem arises.
Frequently asked questions
Does professional indemnity insurance cover mistakes made by subcontractors?
It can, but only if your policy is structured correctly. Some PI policies include subcontracted work as standard while others exclude it unless specifically agreed with the insurer, so check your schedule and wording.
Who is liable if my subcontractor makes a mistake?
You remain responsible for the overall service delivered to the client, so the client is likely to pursue you rather than the subcontractor directly. Your PI policy therefore needs to reflect that you use subcontractors.
Do my subcontractors need their own PI insurance?
Insurers often expect them to hold their own valid PI cover even if your policy extends to subcontracted work. You may need to request proof before engaging them, keep their certificates on file and check their indemnity limits are proportionate to the work.
What should I ask my broker about subcontractors and PI cover?
Ask whether your policy extends to subcontracted work, whether you need to notify the broker each time you use a subcontractor, and what documentation you should keep on file.
Michael Foote, Insurance & Finance Expert
Michael Foote is the founder of Quote Goat and has over 20 years experience working in finance & insurance. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city.
