A Subcontractor Causes Damage on Your Job (Decision Tree)

Why this matters

When a sub damages a customer's property, the customer does not care whose insurance pays, they care that it gets fixed. But behind the scenes, whose policy responds, and how cleanly, depends entirely on decisions you made before this job started: did you collect a real certificate of insurance, does your contract with the sub address liability, and did anyone document what happened. Getting this wrong means you eat a loss that should have been someone else's, or you damage a customer relationship arguing over who pays while the property sits damaged.

Start here: stop the damage, then document

Before any coverage conversation, address the immediate physical situation. If the damage involves an active hazard (a water leak still running, exposed wiring, a structural concern), handle that first the same way you would on any job, then come back to this tree. Once the site is stable:

1. Do not let anyone start repairs, cleanup, or corrective work until it is photographed. Get wide shots of the area and close-ups of the specific damage before anything is touched.
2. Write down what happened while it is fresh: what the sub was doing, what went wrong, the time, and who was present.
3. Notify the customer promptly and honestly. Do not let them discover damage on their own after the crew has left, that turns a repairable incident into a trust problem.

If the subcontractor has a valid certificate of insurance on file

Check it now, not after the fact. If you collected a real certificate before the job started and it was current and adequate for this kind of work, the sub's own general liability policy is very likely the first line of response for property damage they caused.

• Notify the subcontractor immediately and in writing that a claim needs to be filed against their policy.
• Provide your documentation (photos, notes, timeline) to support their claim.
• Keep your own broker informed even if you expect the sub's policy to handle it. If the sub's carrier denies or the claim is contested, you want your own policy positioned to respond without a gap.

If the subcontractor's certificate is expired, inadequate, or you never actually collected one

This is the branch that costs shops the most, and it is entirely preventable going forward. If there is no valid coverage on the sub's side:

• Your own general liability policy becomes the likely path to make the customer whole, and depending on your contract with the sub, you may have limited or no ability to recover that cost from them afterward.
• File the claim with your own carrier and be direct with them about the fact that a subcontractor caused the damage. Do not omit this detail, it affects how the claim is handled and whether any of it can be pursued against the sub separately.
• After this job, fix the process: no subcontractor works under your name again without a verified, current certificate on file before they start. See related: The Certificate of Insurance a Customer or GC Asks For.

If it is unclear whether your crew or the sub caused the damage

Do not let ambiguity turn into an argument in front of the customer.

• Get everyone's account in writing separately, before stories start converging.
• Photograph everything relevant to sequence of events, not just the damage itself.
• Report the incident to your broker regardless of which party you believe is at fault. Let the claims process sort out responsibility rather than trying to resolve it informally on site.

If the subcontractor disputes responsibility

A sub denying fault does not change what needs to happen for the customer.

• The customer's property still needs to be made whole. Do not let a dispute between you and the sub delay that.
• Handle the dispute over who ultimately pays as a separate track, through your contract with the sub and, if needed, through the claims and legal process. Keep the two tracks separate in your own head and in your communication with the customer.

The judgment to bank

The single highest-leverage habit here happens before any job starts: verify every subcontractor's certificate of insurance yourself, do not just file a copy they hand you. A certificate you never actually confirmed is not protection, it is a piece of paper that gives you false confidence right up until the day you need it.

References

• Insurance Information Institute, subcontractor liability and certificate verification
• Trade-standard practice for subcontractor risk management on jobsites
• See related: The Certificate of Insurance a Customer or GC Asks For, Building a Claims File Before You Ever Need One