In any construction project, it is paramount to identify various professionals involved and their responsibilities. There is often confusion between subcontractor vs. general contractor It is important to note these differences, especially when it comes to steering projects and coverage compensation. In this article, we will be discussing general contractors/subcontractors and their roles and responsibilities along with LiteSpeed Insurance.
What is a General Contractor?
A General Contractor is an agent who is authorized to take full control of the construction project right from the initial stage till the end. They act as the core client interface and are responsible for subcontractors, permits, schedules and costs, among other things. General contractors are responsible for the overall management of the entire construction project, including initial planning and up to the stage of project completion to the client’s satisfaction.
For instance, if you are constructing a new house, the general contractor is supposed to find the required professionals, including plumbers, electricians, and carpenters and coordinate all the phases of the construction process. They would also address all problems that may occur while constructing the project, like a delay or alteration of the project plan. General contractors need to be familiar with the construction industry and its processes and work or coordinate many aspects at the same time.
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What is a Subcontractor?
A subcontractor is also a manufacturer who has been awarded subcontracts by the general contractor in a project to undertake special jobs. Subcontractors are specially skilled in one specific profession, for instance, electrical work, plumbing, painting, roofing, etc. Subcontractors, on the other hand, do not deal with the project as a whole. However, rather they are only responsible for a particular discipline.
For example, suppose a general contractor is involved in constructing a commercial building. In that case, they may hire a subcontractor to complete the electrical work. The subcontractor would then be required to do all the electrical work that the general contractor indicates should be done. Subcontracting is usually used with the intention of making sure that certain tasks are handled by people with adequate required skills and expertise.
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Key Differences Between General Contractors and Subcontractors
General contractors and subcontractors are people or companies that are involved in construction projects, and therefore it is crucial to know the difference between them.
Scope of Work:
General contractors are involved with all projects with the main responsibility of supervising the project throughout. On the other hand, subcontractors are organizations that specialize in certain activities or crafts within a given project. It provides room for one not only to delegate general responsibilities to the general contractors but also to make sure that subcontractors capture details well.
Responsibility and Liability:
General contractors are fully accountable for the job. They are also responsible for making certain that all the subcontracts are done properly and within the right time. They are also bound with any problems that may occur during the construction process. Subcontractors work on a certain task which they are supposed to complete. They should ensure that they deliver high-quality work. However, the legal liability for the project’s successful outcomes lies with the general contractor.
Contractual Relationships:
A general contractor deals directly with the client and makes a contract with them that she/he is in charge of the overall project. Subcontractors work under the general contractor, they form a legal relationship with him and work under an agreed scope of work to be provided in the project. Having such a hierarchy means that each of the involved parties understands their duties in the project, thus promoting the proper implementation of the project.
Insurance Considerations for General Contractors vs. Subcontractors
Home insurance is a concern to general contractors and subcontractors as well. The major insurance considerations for general contractors and subcontractors include. Some of the available insurance may differ according to the work done or the extent of the duty assigned.
General Liability Insurance:
Every general contractor, as well as subcontractor, involves general liability insurance to mitigate against property damage, bodily injury, and other related damages. For general contractors, the above coverage is on the whole project, while subcontractors require coverage within their specialty.
Workers’ Compensation Insurance:
Any contractor who has employees takes workers’ compensation insurance as an absolute necessity. It avails payments that help the workers in the instances they get injured while working including treatment costs and wages. Every general contractor shall confirm that all the subcontractors for a project have sufficient workers’ compensation coverage to prevent legal claims.
Professional Liability Insurance:
Professional liability insurance, or more commonly the errors and omissions insurance policy, protects against claims of negligence or mistakes in the professional work done. Such insurance coverage is especially vital to subcontractors because it offsets costs that may arise from mistakes that would cost the client money.
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How to Choose Between Hiring a General Contractor or Subcontractor
The decision of whether to go with a general contractor or a subcontractor depends on the size and scale of the construction work. In the case of works where nationals are expected to pull in other trades for the works to be accomplished, then it is best to hire a general contractor. They know how to handle the entire project and ensure that all the aspects are done on time and within the said cost.
For minor projects or individual tasks that an expert in the field can best complete, it is possible to hire a subcontractor more profitably. Since subcontractors only focus on particular elements, hiring them is cheaper compared to having a general contractor oversee the entire project.
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Conclusion
In conclusion, general contractors and subcontractors are different entities that work together on construction projects. While general contractors have overall responsibility for the project, subcontractors are assigned particular duties. It is, therefore, important to understand these roles in order to manage projects with regard to insurance properly.
Contact LiteSpeed Insurance today to learn more about our tailored insurance solutions for contractors.
About LiteSpeed Insurance
LiteSpeed Insurance is a company that offers insurance products and services to contractors. Having been in the industry for many years, we have a vast understanding of the kind of problems that general contractors and subcontractors encounter. Our coverage services are thorough to guarantee that your company is shielded against possible risks while your projects are running. LiteSpeed Insurance has all the covers you need whether your business is a general contractor in charge of big constructions or a subcontractor who focuses on particular areas of construction. Please visit our website for further details or give us a call today.
