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Insurance for Subcontractors in Kentucky


If you are a new subcontractor in Kentucky and need insurance this is for you. You probably are curious what insurance you are required to have as well as what insurance you should consider having in place. Let’s go over insurance for subcontractors in Kentucky.

One area of insurance we focus specifically on is contractors. From one man shops to businesses with hundreds of employees, we’ve built insurance programs for each level of your contracting business.

Whether you’re a new subcontractor just getting started, or you’ve been in business for years, insurance is probably still a confusing and daunting task. There are certain insurance policies required of you by the state. If you are going to perform work for another business or contractor, they are probably going to have insurance requirements before they allow you on the job site. And then there are some other insurance coverages that it’s simply just a good idea to have in place.

First, let’s go over what is required of you by the State of Kentucky.

What Insurance Are Subcontractors Required to Have In Kentucky

If you are an Electrician, a Fire Protection System Contractor, HVAC, or Plumber, you are required to submit proof of general liability insurance to the state of Kentucky. Depending on the license you may only be required to carry as little as $250,000 per occurrence in general liability coverage, but a good rule of thumb and best practice is to carry at least $1,000,000 in coverage. If you send proof of insurance, better known in this commercial space, as a certificate of insurance, over to someone you’re doing a job for and you only have $250,000 in coverage…they might laugh at you. They’re also more likely to pick the other guy that has $1,000,000. General liability is your typical slip, trip and fall coverage. Your work, sometimes considered faulty craftsmanship, is not covered by general liability. We’ll talk more on that in a minute.

Insurance for Subcontractors When Working for a General Contractor

Next, let’s go over if you plan on working for a general contractor or other business. They are typically going to have specific insurance requirements as part of your contract. Most likely they’ll have a subcontractor agreement for you to sign ahead of the job. The best way to handle this is to provide your insurance agent with a copy of this contract. We need to see this contract to make sure we have your insurance set up properly. We can’t insure what we don’t know. You want this process to go smooth with the general contractor or business you are working with so it helps you and us if we can see the contract so we get this right the first time, and there’s no back and forth.

Some insurance companies simply cannot meet the requirements of these contracts. They may require specific endorsements and policy language. It is another reason why you need to make sure you are working with an independent insurance agent like Reed Brothers in this case. 

What Insurance Should Subcontractors Have?

Lastly, let’s go over some insurance that you may also need or at least is a good idea to have.

Commercial Auto Insurance

Let’s start with business or commercial auto. Do you have a vehicle that’s wrapped with your logo or a magnetic sign? In that case you probably need business auto insurance instead of your personal car insurance. If you have several company vehicles or a fleet, it’s a good idea to ask some more questions of your agent on this one. Are your vehicles are wrapped in your company logo? You need to add some additional coverage for that wrap. If that vehicle gets damaged, there is not automatic coverage to pay to re-wrap it. You may also be eligible for certain discounts depending on the safety features and programs you have in place.

Building or Property Insurance

Do you own or lease a building? If you own it, you’ll need a property policy to insure that building. Depending on your lease, you may also be required to insure the building. Do you have building materials or other inventory in your building? You may want contents coverage for those items.

Inland Marine or Tools Insurance

Something else to consider is typically called inland marine coverage. What we’re going to cover here are different tools you or your employees have, work trailers, and equipment you lease from other businesses. You may also want to add on an installation floater here to cover materials you have at different jobsites.

Subcontractor Bonds

Are you looking at taking on larger jobs that require you to be bonded? Bid bonds, performance and payment jobs, and other surety bonds may be required especially if you’re doing a job for a state or governmental entity. It’s important to work with an agent with knowledge in this area that can help secure that bond for you. It’s equally, if not more important, that you and your business have your financial house in order before jumping into this.

Contractors Errors and Omissions Insurance

Remember when I said faulty craftsmanship is not covered earlier? No matter how long you’ve been doing it, or how careful you are, mistakes can happen, right? Maybe it wasn’t necessarily your fault, but you installed faulty materials from your supplier? When the client suffers financially because of your mistake (maybe there were project delays, loss of income, reinstallation of floors, etc.), the contractor’s E&O policy can cover your liabilities. It is important to note that if your faulty workmanship causes property damage or bodily injury to the client, that is a general liability claim. The contractor’s E&O insurance policy is meant to supplement the gaps on your commercial liability policy.

Workers’ Comp Insurance for Subcontractors

Last, but not least–workers’ compensation. We talk about this more in depth in our other videos, but set this right up front. Just because you’re 1099-ing guys that doesn’t mean you don’t have employees. It just means you aren’t giving them W2s. What if they get hurt? if uninsured subcontractors working for you get hurt, they can file for workers comp claims against you. If you have a policy, that policy will be obligated to pay provided they were hurt in the course of work for you. However, if you don’t have a policy, you are still financially responsible for their injuries and lost wages. 

Next Steps

If you are a subcontractor in Kentucky, and have more questions about your insurance, give us a call at 606-679-6311 or email me at Check out our other videos for your contracting business.

We look forward to working with you.