Do tree service subcontractors need their own insurance?

Using subcontractors is common in the tree service industry — particularly during storm season, for specialized crane work, or to handle overflow during busy periods. However, every subcontractor you engage creates a potential liability exposure for your company if they are not properly insured.

Most states have statutory provisions that hold the general contractor (the hiring company) responsible for workers' compensation coverage for uninsured subcontractors. If a sub's employee is injured and the sub does not carry workers' comp, the injured worker can file a claim against your workers' comp policy. Your insurer will pay the claim and then increase your premiums accordingly. In many states, your insurer will also conduct a payroll audit and retroactively charge you premium for the uninsured sub's payroll as if those workers were your own employees.

On the general liability side, if a subcontractor causes property damage or injures a third party, the property owner or injured person will typically sue both the sub and the company that hired them. Your general liability policy will respond to defend you, but the claim will affect your loss history and future premiums. Having subcontractors carry their own GL coverage with limits matching or exceeding yours (typically $1M/$2M) provides a primary layer of coverage that responds before your policy.

Best practices for managing subcontractor insurance include requiring a COI before any sub starts work, verifying that coverage is active (not just that a certificate was issued), requiring the sub to name your company as an additional insured on their GL policy, requiring a waiver of subrogation endorsement on both their GL and workers' comp policies, and maintaining a log of all sub COIs with expiration dates.

The TCIA recommends that all tree care companies maintain written subcontractor agreements that specify insurance requirements, indemnification provisions, and safety standards. This documentation is critical in the event of a claim. Without a written agreement, your ability to enforce insurance requirements and pursue indemnification from the subcontractor is significantly weakened. Many tree service companies create a standard subcontractor packet that includes the agreement, insurance requirements, safety rules, and a hold-harmless clause.