# Questions For the Guys That Sub Out Work



## Mitragorz (Oct 11, 2013)

Between driveways and a low-traffic National Guard complex, my little two-truck outfit is full this year. I've never subbed out work before, nothing more than throwing a guy a few bucks to cover a few driveways when I had a truck down.

I was contacted to give prices for a few banks in the area, and I don't have the resources to personally dedicate equipment to these sites, but I'd still like to try to make a little money off of them (I have a newborn, every little bit helps!)

My question is about liability. I know that an injured party will sue everybody, but how can I separate myself from the liability of slip-and-falls? How can I place the liability on the sub? I can write it into a contract, that he must provide his own liability insurance, but is that good enough? What if he signs the contract but doesn't actually pick up the GL?

I DO carry GL for my business. I worked out a good rate with a local ins. company, but that low rate is based on the locations I service now, and the agreement that I stay away from high-traffic areas like malls and shopping centers. I'm sure a bank would qualify as high-traffic and my rates would shoot up.

I'm waiting on more info on these accounts. If it's a seasonal price they want, it'll be easy to factor in the cost of extra GL, if I need to pick it up. If it's per-push, then I run the risk of being stuck with a large bill and not enough income.

I'm trying to do this on-the-books and legal as possible.


Thanks guys. I have a few more questions, but they don't really apply if this doesn't get off the ground.


----------



## SnoFarmer (Oct 15, 2004)

A sub- contractor is a stand-alone business( not an employee,) that "should" have all the proper insurance.
You can ask for verification or prof of coverage and require it.

I think you may need some guidance on the differences between a employee and a subcontractor.
https://www.irs.gov/businesses/smal...ependent-contractor-self-employed-or-employee

as you want to go legit...


----------



## ponyboy (Dec 19, 2006)

What national company asked you to do banks 
Walk away don't get involved 
We did TD last year had 8 of them all stores signed off on work every storm 
Other banks had bad service in a different state and I lost my accounts


----------



## Mitragorz (Oct 11, 2013)

I wasn't sure if I would hold some kind of liability for being the one that essentially have the jobs to the sub. I have visions of lawsuit paperwork flying all around. 

Thanks for that link. Employee vs sub... Looks like a muddy line. Most of the info here (http://bridgenex.com/irs-guidelines.html) points to being a sub. But the link you gave makes me lean towards employee. 

A sub can't be told when to work or given instructions? How does that work. "I need you to plow this lot when it snows. You also need to shovel and salt the walks." How do you get around telling a sub in any field what the job is that needs to be done, and when to do it??


----------



## Mitragorz (Oct 11, 2013)

ponyboy;2147484 said:


> What national company asked you to do banks
> Walk away don't get involved
> We did TD last year had 8 of them all stores signed off on work every storm
> Other banks had bad service in a different state and I lost my accounts


Sent you a PM.


----------



## Mitragorz (Oct 11, 2013)

I think I'm just gonna listen to my gut and let some other guy deal with the hassle. I don't need to drive myself crazy worrying about this stuff.


----------



## FredG (Oct 15, 2012)

Mitragorz;2147488 said:


> I think I'm just gonna listen to my gut and let some other guy deal with the hassle. I don't need to drive myself crazy worrying about this stuff.


You got it and stick with it. Add some accounts when you add another truck-machine to your fleet. I won't comment on the national, It's a dead issue.


----------



## ponyboy (Dec 19, 2006)

I'm finding in going back to residential less risk and almost same money in my area


----------



## SnoFarmer (Oct 15, 2004)

Mitragorz;2147485 said:


> A sub can't be told when to work or given instructions? How does that work. "I need you to plow this lot when it snows. You also need to shovel and salt the walks." How do you get around telling a sub in any field what the job is that needs to be done, and when to do it??


The sub should know how to plow snow and how to spread salt.

When you hire a plummer to replace your hot-water heater what do you tell him? (you just hired a contractor. a sub is no different)..

You can tell them the trigger depth, what time the works need to be done by and the scope of the work.

you can't tell them what plows/equipment to use, how to plow snow or how to spread the salt.
Just when the work need to be done.


----------



## JMHConstruction (Aug 22, 2011)

The contractor I subcontract for makes me add his company to my insurance. That way they are notified if I cancel (or just don't have) my insurance. It's called something, but I'm drawing a blank. It costs the sub a little bit of money (I think mine is 10% of my GL cost or something), but it's worth it to the contractor.


----------



## Randall Ave (Oct 29, 2014)

If an accident happens, everybody gets sued, it's just the way it is. If you have the contract, liability will fall on you, and your sub.


----------



## ponyboy (Dec 19, 2006)

No liability for the national company 
You sign and take all of it 
When you signed with a national company you basically are a subcontractor to begin with and then you want to sub it out again there is enough money left to resolve it for anybody to be willing to take it


----------



## seville009 (Sep 9, 2002)

JMHConstruction;2147498 said:


> The contractor I subcontract for makes me add his company to my insurance. That way they are notified if I cancel (or just don't have) my insurance. It's called something, but I'm drawing a blank. It costs the sub a little bit of money (I think mine is 10% of my GL cost or something), but it's worth it to the contractor.


"Additional insured" I think is the term.


----------



## Mitragorz (Oct 11, 2013)

Like I said, I'll just tell them I can't do it. I'm not committed to anything, they cold-called me looking for numbers. 

I don't need the stress, the liability... Or the paperwork!


----------



## Randall Ave (Oct 29, 2014)

seville009;2147512 said:


> "Additional insured" I think is the term.


That's what your looking for. I do a lot of municipal work. The township is on my policy as a additional insured.


----------



## Randall Ave (Oct 29, 2014)

ponyboy;2147510 said:


> No liability for the national company
> You sign and take all of it
> When you signed with a national company you basically are a subcontractor to begin with and then you want to sub it out again there is enough money left to resolve it for anybody to be willing to take it


So your saying this is a Nationals account. He wants to take it on, then sub it out. Big mistake if he doesn't get paid.


----------



## ponyboy (Dec 19, 2006)

Yup 
But he is passing on it


----------

