Hiring an uninsured contractor can be a risky situation for a business. If an accident or loss occurs during their work, the business may be held liable if the contractor does not have sufficient insurance coverage. By requiring contractors and vendors to have insurance coverage, businesses can protect themselves against potential risks and liabilities.

A certificate of insurance is a document that verifies the existence of an insurance policy and provides important information about the coverage it offers. By the insurance from a contractor, you can ensure that they have the necessary coverage to protect your business in the event of a claim, lawsuit or injury onsite.

There are risks to hiring uninsured subcontractors, but you can legally protect your business. You may have to pay for the damages caused by an uninsured subcontractor's negligence or flaws in their work, even if it was not your fault. They may not be licensed, which means they cannot legally perform certain types of work. If they don't carry proper insurance, you could be held liable for their medical expenses.

Businesses often hire subcontractors to perform specific duties for their business. In doing so there are certain things you should be collecting from these individuals or businesses to help ease the burden of tracking for 1099s, workers compensation insurance audits and even protecting you against legal ramifications.