Contractors: How can I easily verify my subcontractors?

Welcome to 4Contractors by 4C Advising → your place to build your strongest contractor business yet! The 4C series is simple. In each post, we answer one burning question contractors have so you can take care of business. Let’s jump in!

Q: How do I verify my subcontractors?

Have you hired a subcontractor for your business? Do you plan on hiring one soon? 

If so, it is extremely important to establish a formal relationship between your business and the subcontractor from the very beginning. Doing so lets you set expectations, define roles and responsibilities, and set terms and conditions. These steps can help you reduce risk and disputes moving forward.

Verification is just one of a number of steps that help you establish a solid subcontractor relationship. Here’s an overview of what to consider when setting up a subcontractor agreement:

• Prequalify your subcontractor. Before you begin writing a contract, make sure your subcontractor has the qualifications to do the work you desire. Ensure they have the team to do the job and any necessary certifications, which you can request a copy of. 
• Ensure that your subcontractor is adequately insured and request certificates of insurance upon working together. The subcontractor’s insurance policy should also name the contractor (your company) as an additional insured with proper endorsements. Specifically, they should provide:
  • Certificates of insurance showing their business name as the named insured on an ACORD 25
  • The subcontractor’s insurance policy should also name the contractor (your company) as an additional insured with proper endorsements. 
  • Insurance policies they might need to provide include: workers’ comp, general liability, auto liability, and umbrella coverage. (P.S. – We have a handy tool to help you track all of this.)
• Define your scope of work. You’ll want to clearly define the scope of work, including services, roles and responsibilities, and deliverables. According to Zywave, you may also want to define “requirements for quality, including the requirement to allow independent quality inspections of materials and processes.”
• Define terms and conditions. In addition to roles and responsibilities, you should clearly define deadlines, expectations, termination conditions, and payment information. Specify the payment terms, including how and when you will pay the subcontractor.
• Set compliance standards. You’ll want to ensure that all parties are willing to comply with labor laws, safety standards, environmental regulations, and more.
• Set dispute resolution expectations. These should be noted in your agreement, as it outlines how you will work through the dispute using mediation or arbitration. 
• Specify confidentiality standards. Confidentiality is essential to note when protecting sensitive information and intellectual property.

Would you be ready to simplify contractor verification? Please inquire about our tool, which takes the guesswork out of verification to ensure you and your subcontractors are covered.

Take it from JP…

“Michael and his team are very professional and extremely knowledgeable. They have our best interest as their customer, and they actively collaborate with us on securing the best value coverage to protect our business and our electronic data with the ever-changing Technologies and Market environments, so that we are focused on extending the best-in-class quality service to our clients. As a CEO and President of [my company], protecting the interests of our clients through effective quality value proposition, service, and efficiency, are precisely the type of attributes that we model and share with all of our clients, partners, and sub-contractors. Michael Fusco and team….Thank you.” – JP

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Fusco Orsini & Associates Insurance Services and 4C Advising work in tandem to provide small- and medium-sized businesses with professional guidance as well as vetted and competitively priced insurance, risk, compliance, HR, and wellness solutions.