As a general contractor (GC), you have a lot of responsibility for a project. That’s why it is so important to hire only reputable subcontractors for every job that you accept.
Let’s examine why it can ultimately be the GC who is left holding the legal bag when things go south on a construction project.
Your name is on that contract
You create a legal relationship with the client when you sign the contract for the job at hand. That means that if something goes wrong with the build, you will be the one they come after legally when seeking damages.
This is true even when you did no actual work on the structure. General contractors typically are the supervisors on the job sites. Some owners of small construction companies may engage in building tasks along with their crews, but this is more the exception than the rule.
Can you protect yourself from legal liability?
Even the most ironclad contracts only go so far. At the end of the day, the contractor does bear liability for substandard work by the subcontractors on a job. The best protection here is twofold. First, hire only skilled subcontractors whose work you have seen and who have spotless reputations as reputable players in the construction industry.
Second, make sure that you carry sufficient insurance to cover the damage caused by any subcontractors on the job. Even the best subs can have an off day and make errors. If your policy limits are too low, consider adding a special rider to cover the subcontractors you hire.
What happens if you get sued?
After a problem is discovered, be proactive in finding a solution. There are other paths toward resolution that do not include litigation. Still, it is always wise to loop in your legal team at the first hint of a problem with a client.