Does Public Liability Insurance Cover Sub-contractor?

A self-employed individual engaged in risk-associated projects must buy public liability insurance. The professions and businesses that are highly prone to risk may hold an insured liable for certain acts while discharging his duties. General liability insurance is purchased to settle the claim of a third party. However, it is essential to learn if public liability insurance covers subcontractors.

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Public Liability Insurance

Public Liability Insurance (PLI) covers subcontractor. An individual discharging his duty as a subcontractor for a third party may make errors or omissions. He might be held liable by the contractor for his acts in the course of his employment. He is vulnerable to several kinds of damages and losses. Hence, a subcontractor may avail of public liability insurance. 

Requirement of PLI

A subcontractor is generally held responsible for the loss or damage caused to a third party during the business activity. He would be obligated to pay appropriate compensation to the third party. In addition, public liability insurance is imperative at construction sites. These sites are prone to risk when the workers discharge their duty in a hazardous environment. Therefore, if something went wrong, the subcontractor would have to pay compensation for the injury suffered by the workers at the construction site.

Cost of PLI

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 PLI

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 of PLI

  • ABC contractor won a quotation for building a hospital in Delhi. The project was extensive which mandated them to hire a subcontractor in order to build the hospital within the stipulated time. The hired individual possesses public liability insurance that covers the subcontractor. 
  • The construction work started in a full swing. While lifting some concrete, a worker lost his balance which resulted in the falling down of concrete on a senior citizen passing through the construction site. 
  • The senior citizen or victim was admitted to the hospital which cost him INR 5,00,000 in order to save his life. The victim instituted the suit for negligence in the Saket district court having jurisdiction to deal with the matter. The court held the subcontractor vicariously liable for the actions of his worker and mandated him to pay the appropriate compensation to the victim. 
  • The subcontractor approaches the insurance company and settles the claim.


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.

Written By: PolicyBazaar - Updated: 16 August 2023
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