Why a Strong Subcontractor Agreement Isn’t Optional—It’s Critical

At Haughn Insurance, we’ve seen what happens when businesses let subcontractors on site without the right paperwork in place. Spoiler: it rarely ends well.

Whether you’re a general contractor managing multiple crews or a business owner bringing in outside help for a specific project, how you handle subcontractor relationships can have a lasting impact—not just on your jobsite, but on your insurance, your financials, and your company’s future.

One of the best tools you have to protect your business? A solid subcontractor agreement.

What Is a Subcontractor Agreement?

It’s more than a handshake and a scope of work. A subcontractor agreement is a legally binding contract that outlines expectations, responsibilities, insurance requirements, and—most importantly—who’s liable if something goes wrong.

It helps ensure your subcontractors aren’t just doing the job—they’re doing it in a way that protects your business from claims, lawsuits, and insurance headaches.

3 Reasons You Can’t Afford to Skip It

1. It Defines Responsibilities and Reduces Legal Risk

A clear agreement spells out exactly who’s doing what. If there’s an injury or property damage, that agreement can protect you from being held responsible for something outside your control.

No agreement? You may be on the hook for someone else’s mistakes.

2. It Transfers Risk Where It Belongs

The right language—indemnification clauses, hold harmless provisions, insurance requirements—ensures that subcontractors are responsible for their own work and workers.

When a claim is filed, you want to be the last name mentioned, not the first.

3. It Guards Against Uninsured Subcontractors

If your subcontractor shows up without coverage—or with the wrong coverage—you could be footing the bill. Your agreement should:

  • Require general liability, auto, and workers’ comp coverage

  • Include Certificates of Insurance (COIs)

  • Add your business as an additional insured

  • Include a waiver of subrogation

These aren’t just good practices—they’re essential.

The Insurance Impact: What’s at Stake?

Your premiums are based on risk. When subcontractors cause losses, skip coverage, or don’t sign agreements, that risk lands squarely on you. Here’s what that can look like:

  • Higher claims = higher premiums

  • Audit surprises = uninsured subs treated as employees, boosting your payroll totals

  • Coverage issues = insurers may deny claims or cancel policies altogether

Underwriters want to see that you manage your risks. A subcontractor agreement proves that you do.

Subcontractor Agreement Checklist

Before work starts, make sure every agreement includes:

✅ Defined scope of work
✅ Payment terms and timelines
✅ Indemnification and hold harmless clauses
✅ Insurance requirements + proof of coverage
✅ Additional insured + waiver of subrogation language
✅ Compliance with local, state, and federal laws

Bottom Line

Letting subcontractors start without a signed agreement is like running a jobsite without safety gear—it might seem fine until something goes wrong.

At Haughn Insurance, we help contractors and business owners across Ohio put proactive risk management in place. That starts with your subcontractor agreements. If you’re not sure where your contracts stand—or you’ve been burned before—let’s talk.

Protect what you’ve built. Make sure your subcontractors are doing the same.