Does a Builder's Public Liability Cover Subcontractors? What Brisbane Head Contractors Need to Check
Updated: Oct 5
Every Brisbane builder relies on subcontractors. Plumbers, sparkies, tilers, plasterers, roofers and concreters often do more of the work on a typical residential job than the builder's own crew. That raises a question most builders only ask after something has gone wrong: if a subcontractor damages property or injures someone on your site, whose insurance actually pays?
The short answer is that your public liability policy will often respond. How it responds, and whether it responds in full, comes down to details most builders never check. Your policy wording, the subcontractor's own cover, how you have declared subcontractor payments and what your contracts say all play a part.
This guide is written for head contractors who engage subbies. If you want an overview of the full insurance package a building business carries, see our Builders Insurance Brisbane page.
A Brisbane Claim Scenario: The Subbie Whose Cover Had Lapsed
Picture a small building company based in Wynnum with three staff and a handful of regular subcontractors, mostly doing renovations across Brisbane's eastern suburbs. Partway through a bathroom and laundry renovation, the subcontracted plumber punctures a water pipe while running new plumbing through an internal wall. Water tracks through the ceiling cavity overnight, damaging the client's existing flooring, plasterboard in the adjoining room and furniture stored in the hallway.
The client's contract is with the builder, not the plumber, so the claim lands on the builder's desk. The builder's insurer accepts it under public liability and pays for the client's damaged property. The insurer then looks to recover its costs from the plumber, which is when the problem surfaces. The plumber's public liability lapsed four months earlier after a missed renewal payment. The builder had a certificate of currency on file, but it was last year's.
Now there is no insurer on the other side to recover from. Depending on the builder's policy wording, a condition requiring subcontractors to hold their own cover could mean a higher excess or a reduced settlement. And the builder's claims history carries a loss that was not caused by his own crew, which follows him to renewal.
This scenario is illustrative and does not describe a specific client claim.
How a Builder's Public Liability Treats Subcontractor Work
As head contractor, you can be held legally liable for damage or injury caused by subcontractors working under you. Clients, neighbours and members of the public will usually pursue you first, because you hold the contract and control the site.
Most builders' public liability policies are designed to cover your legal liability arising from work done on your behalf, including work done by subcontractors. That is not the same as covering the subcontractor. Your policy protects your business, not theirs, and your insurer will generally try to recover what it pays from the subcontractor responsible. This is known as subrogation.
Three things commonly shape how a subcontractor claim plays out.
Subcontractor conditions in your policy. Many builders' policies require subcontractors to hold their own public liability at a stated minimum, often $10 million or $20 million. If a subbie does not have it, the insurer may apply a higher excess, reduce the claim or, under some wordings, decline it. Other policies have no such condition. You need to know which kind you hold.
How subcontractor payments are declared. Builders' premiums are often rated on turnover, wages and amounts paid to subcontractors, with insured and uninsured subbies sometimes treated differently. If those figures are understated at renewal, it can complicate a claim later.
What your contracts say. Head contracts and subcontract agreements often contain indemnity clauses. Public liability policies generally cover liability you would have at law, and can exclude liability you have taken on purely by agreeing to it in a contract. Signing a contract that makes you responsible for everything on site is a risk your policy may not match.
For the separate question of whether public liability pays to fix the work itself, see:
Who Pays for What: Common Subcontractor Situations
Every policy is different, so treat this as a general guide to where a claim usually starts rather than a guarantee of outcome.
Situation | Usually responds first | What to check |
Subbie damages the client's property (not the works) | Builder's public liability, with recovery sought from the subbie's insurer | The subbie held current cover; your policy's subcontractor condition |
Subbie damages the works under construction, such as a fire from hot works | Contract works policy | Whether subcontractors' interests are covered, and any hot works conditions |
Member of the public injured by a subbie's unsecured materials | Builder's public liability, with recovery sought from the subbie | Site safety responsibilities set out in the subcontract |
Subbie injured on site | The subbie's own cover (personal accident, or WorkCover if they employ staff) | Whether the subbie could be treated as your worker for WorkCover purposes |
Subbie's tools stolen from your site | The subbie's own tools insurance | Your tools policy usually covers your own gear only |
Subbie's faulty work needs to be redone | Usually no insurance; this is a contract and warranty issue | Defect and rectification terms in the subcontract |
For more on how the works themselves are protected, read What Is Contract Works Insurance and Do Brisbane Builders Need It?
The WorkCover Question: When Is a Subbie Actually a Worker?
In Queensland, someone you call a subcontractor is not automatically outside WorkCover. Depending on how the arrangement is set up, a contractor can be treated as a worker. Common signs include being paid mainly for their labour, working under your direction and not genuinely running their own independent business. Holding an ABN does not settle the question on its own.
If a subbie is treated as your worker, an injury becomes a claim on your WorkCover Queensland policy, and what you pay them may need to be declared as wages. Getting this wrong can mean back premiums, and an injured subbie with no cover of their own may look to you for compensation instead. WorkCover Queensland publishes guidance on working this out, and it is worth checking for any regular subbie who works mostly or only for you.
What to Check on Every Subcontractor's Certificate of Currency
A certificate of currency is only useful if you read it properly and keep it current. For each subbie, check:
The insured name matches the business you are contracting with, including the ABN.
The policy period is current, and the expiry date is in your diary.
The limit of liability meets your contract and your own policy's subcontractor condition.
The business description matches the work they are doing for you. A policy written for maintenance plumbing may not suit roof plumbing on a new build.
Any key restrictions, such as height limits or hot works conditions. Certificates rarely show exclusions, so ask the question directly.
WorkCover, if the subbie employs their own staff.
The most common gap is timing. Builders collect a certificate when a subbie first starts and never ask again. Request a fresh certificate each time a subbie's policy renews, and keep a simple register of expiry dates for everyone you use regularly.
Setting Up Your Own Policy for Subcontractor Work
Checking your subbies is half the job. The other half is making sure your own cover is built for how you actually run jobs:
Know whether your public liability wording includes a subcontractor condition, and what minimum it sets.
Declare subcontractor payments accurately at every renewal.
Make sure the insurance and indemnity clauses in your subcontract agreements line up with your policy.
Check what head contracts and principals require of you before you sign, such as being noted on your policy or specific cross liability wording.
Confirm your contract works policy covers the interests of subcontractors working on the project.
A broker can review your wording against the way you engage subbies and flag gaps before a claim exposes them. For the full range of cover a building business carries, visit our Builders Insurance Brisbane page.
Frequently Asked Questions
Do my subcontractors need their own public liability if I have it? In practice, yes. Your policy protects your business, and your insurer may pursue an uninsured subbie for what it pays out. Many builders' policies also require subcontractors to carry their own cover.
Can I add my subcontractors to my public liability policy? Some policies can be arranged to extend cover to subcontractors, but it is not standard and is priced accordingly. Requiring each subbie to hold their own cover is the more common approach.
What happens if a subbie's insurance lapses partway through a job? Your own policy may still respond to the third party claim, but your insurer loses the ability to recover from the subbie's insurer, and a subcontractor condition in your policy could reduce what you receive.
If a subbie has an ABN, are they outside my WorkCover? Not automatically. Queensland looks at how the working arrangement operates, not just whether the person has an ABN.
If you engage subbies regularly and have never checked how your policy treats their work, it costs nothing to have it reviewed. Speak to a broker.
Monarch Insurance Brokers Pty Ltd is an Authorised Representative (AR Number 001322399) of Morgan Insurance Brokers Pty Ltd, authorised with ASIC under AFSL 700265. This article contains general information only and does not take into account your objectives, financial situation or needs. Before acting on any information here, consider whether it is appropriate for your circumstances and seek personalised advice.
