Does Public Liability Insurance Cover Sub-contractor?

Public liability insurance also covers subcontractors. As a subcontractor, you are exposed to potential losses or damages. Additionally, subcontractors often run their own small businesses. Regardless of working under someone else, you are accountable for your actions. Therefore, if your business activities cause damage or loss to a third party's property, you would be responsible for compensating the affected party.

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Requirement of Public Liability Insurance for Sub-contractors

It is necessary at many construction sites to purchase public liability insurance. Subcontractors in the construction sector frequently work in hazardous conditions, so it's crucial to protect yourself from potential costs and expenses if something goes wrong. This insurance covers property loss or damage you cause to another party, but it does not cover any personal loss or injury you might suffer. Also, after the Bhopal Gas Tragedy, 1984, after this in 1991, the public liability insurance act was brought by the government with the main objective of providing coverage to the affected third party.

It is important to note that the person or company hiring your services will not cover the costs associated with a claim. Therefore, subcontractors need to purchase their own public liability insurance policies. Companies hiring subcontractors should ensure that all subcontractors have public liability insurance coverage. If both you and your subcontractor are responsible for property damage, the responsibility for settling the claim will be shared.

Depending on your business operations, you can pay extra to expand your public liability insurance coverage to include expenses arising from:

  • Transportation
  • Natural calamities
  • Sudden and accidental pollution
  • Defense costs incurred with prior consent

Cost of Public Liability Insurance for Sub-contractors

It is important to note for an individual that public liability insurance cover subcontractor. Therefore, a company or firm that hires a subcontractor shall not be liable to cover the losses or claims made by the third party. It is crucial for a subcontractor to buy general liability insurance. 

Additionally, the companies hiring subcontractor verify if he has purchased comprehensive liability insurance. In order to win a quotation, an individual must possess public liability policy. However, when a third party suffers from a property loss or other losses due to the act of the principal contractor as well as the sub-contractor, the loss shall be divided between both parties.

Claim for Public Liability Insurance for Sub-contractors

A subcontractor must learn about the process of claiming public liability insurance. No standard procedure is defined to claim the liability policy. It generally varies from insurer to insurer. However, the policyholder must possess the relevant documents required at the time of claiming PLI. The insurance investigator shall ask several questions in order to ensure the validity of the claim made by the insured. 

The insured must apprise the insurer immediately after the claim arises. He must complete the necessary formalities in the first place. 

Upon informing the insurers, the insurance company shall appoint a surveyor in order to investigate the claim and evaluate the loss required to be paid by the insurer. Upon verification, the insurer shall settle the claim if found valid. This is how public liability insurance cover subcontractor.

Case Scenario under Public Liability Insurance for Sub-contractors

Sunrise Builders secured a contract to construct a community center in Bangalore. Given the scope of the project, they enlisted the services of Rajiv Sharma, a subcontractor with several years of experience in the construction industry in Bangalore.

During the project, a construction worker dug a trench at the site. An elderly man, passing by, accidentally fell into the trench. Fortunately, the construction team quickly rescued him and rushed him to a nearby hospital, where doctors were able to treat him. The man demanded compensation of Rs 12 lakh, including coverage for medical expenses.

The man filed a case against Rajiv Sharma, the subcontractor. Since Rajiv had a public liability insurance policy, he promptly notified his insurer about the claim. After investigating, the insurer found that the construction worker was at fault because the trench was not properly marked, and there were no warning signs about the construction work.

The man suffered severe injuries to his leg and shoulder, and the insurer agreed to compensate him. The public liability insurance company covered both the compensation and the medical expenses.


A subcontractor may also be held legally responsible for the negligence caused to a third party. Hence, it is important for the sub-contractor to purchase public liability insurance that covers subcontractors.

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