General contractors to a construction project routinely hire independent subcontractors to perform specialized services such as electrical work and plumbing. However, is the general contractor responsible for third-party injuries caused by a subcontractor’s shoddy work?
A general contractor’s liability
Usually, general contractors are not held responsible for the acts of independent subcontractors. Employers can be held responsible for an employee’s negligence, but independent contractors like subcontractors are not employees. So, a general contractor who hires an independent subcontractor might not be held liable for the subcontractor’s acts.
However, general contractors might be held liable for a subcontractor’s negligent work if that negligence injures a third party and:
- They did not warn the subcontractor of “peculiar risks” on the premises,
- They did not do their due diligence when hiring the subcontractor and the independent contractor had a history of legal or regulatory violations, or
- They asserted some level of control over the subcontractor’s work
These situations either devest subcontractors of their knowledge of worksite conditions, hold general contractors responsible for negligent hiring or transform the nature of the subcontractor’s work from that of an independent contractor to that of an employee.
General contractors can purchase general liability insurance. This covers them from third-party tort claims brought by a person injured by a subcontractor’s negligence.
General contractors can also require subcontractors to purchase an Owners and Contractors Protective (OCP) policy. This type of insurance covers claims by a third party brought against the general contractor due to the subcontractor’s negligence.
General contractors can avoid liability for third-party claims if they carry the right insurance, do their due diligence and do not asset control over a subcontractor’s work. Contractor negligence can be a costly issue that with proper planning can be mitigated.