As a contractor, you may need to engage subcontractors to assist with the completion of a project. Even huge construction companies engage subcontractors for specialized jobs that their personnel aren’t especially competent at. Subcontractors may contribute much-needed knowledge to the task, but how do you choose a trustworthy person and/or company? We’ll go through how you can accomplish precisely that.
Subcontractor Contract
Your working relationship should begin with a Subcontractor Agreement to safeguard both your company and the subcontractor’s business. It’s critical to mention in the agreement that the subcontractors are not your employees and that they are responsible for their own benefits and taxes. The scope of the project, the subcontractor’s obligations, the compensation rate, and any deadlines or milestones that must be completed should all be included in the agreement.
It’s also a good idea to add a clause allowing you or the subcontractor to cancel the contract with a specific length of notice. Further safeguards should be included in case you fail to pay the subcontractor or their performance is subpar. If the job is poor, you must also identify which party will be accountable for repairing it.
Other Crucial Considerations
There are a few more things you should take before employing a subcontractor to safeguard your business:
Insurance certificate. Include a term in your agreement requiring subcontractors to have worker’s compensation, vehicle liability, and general liability insurance. To confirm that they have appropriate coverage, get a certificate of insurance.
Indemnification. You should also have the subcontractor sign an Indemnification Agreement. When a person or a firm signs this form, they agree to accept responsibility if a lawsuit is filed against your company due to an event linked to their job.
Employing subcontractors, for whatever purpose, may aid in the completion of a project. Yet, like with any contractor, it is critical to safeguard yourself and your company before bringing someone else into a project.