If you use subcontractors to help complete jobs – and nearly all of us small business owners do; make sure that your contractors have their insurance policies to utilize. In the unfortunate incident that your company is sued because of work that a subcontractor did, many small business owners will be shocked that their liability policies are not enough to cover the suit. Technically, the subcontractor does not work for your company, is not paid as an employee, and therefore receives none of the coverage that your small business insurance policy provides.

If a lawsuit is brought against you, it is already too late. Don’t put your business under unnecessary risk; make sure that your subcontractors have adequate insurance to cover a claim for their work. Also, it is a good idea to have ironclad subcontractor agreements drafted up so that you can ensure that each party is responsible for the work they provide.

You should also ensure that your subcontractors have the proper insurance coverage out of respect for them. Nobody likes to be blindsided by lawsuits, and ensuring that your subcontractors are covered will only help to grow the professional relationship that you two have.