Do you have occasion to hire a sub-contractor? There once was a disaster restoration company that was called to dry out a home due to a leaky roof. The restoration company (hereafter noted as the RC) contracted a roofer to install a tarp over the roof to temporarily stop the leak until a fix could be made. During the night, about four inches of snow fell on the tarp. Good thing they called that roofer, right? Well, it would have been, except that when they installed the tarp, they covered the exhaust vent of the home’s gas furnace. Several hours later, the family was rushed to the hospital for carbon monoxide poisoning.

A claim was made on the RC and sub-contractor. But although this should have been a slam dunk against the sub-contractor, it wasn’t, because that RC failed to get the sub-contractor to sign an agreement.

Oops, Where Do You Go From Here

The matter was eventually resolved, but the RC had to pay $20,000 because of this dangerous oversight.

Sub-contractors are a necessity for any RC, yet you should not only be extremely careful when selecting one, but you should also get an agreement signed that addresses the scope and quality of their work. It needs to contain important protections for your business, including indemnification and hold harmless provisions in addition to insurance requirements in the event a claim arises due to the subcontractor’s work. Also, the subcontractor must provide a copy of a valid Certificate of Insurance naming you as an additional insured prior to beginning work, which is the proof you need to establish that they have acceptable insurance.

Sub-Contractor Friend or Relative? Doesn’t Matter

Is the sub-contractor a close friend or relative? It doesn’t matter. If they truly care about you, they won’t balk at putting their autograph on this agreement. There’s no faster way to destroy a relationship than by getting sued for their work. Handshakes are great, but they don’t hold up in a court of law.

So get it signed. Get it done. Breathe easier.