Subcontractors: insurance clauses to be demanded before they enter the worksite

Introduction

On a construction site, disasters never strike at a convenient time. When they do, the question isn't just "who did what," but "who is insured, for what, and with what proof?" For an SME, requiring subcontractors to have the right insurance clauses before work begins is an act of good governance: it reduces surprises, speeds up claims management, and makes decisions accountable (for management, CFO, HR). This article provides a simple method: manage, document, monitor. You'll learn which clauses to require, which documents to collect, which exclusions to anticipate, and how to organize the audit.

1) Why frame the project before starting construction?

The real risk: the contractual and documentary blind spot

A subcontractor may be competent but administratively vulnerable: expired insurance, inadequate coverage, undeclared activity, falsified documents. In the construction sector, Suva explicitly reminds us that if you hire subcontractors, you must examine their documents to protect yourself against potential fraud. (Suva, “Subcontractors: Rights and Obligations”).

Responsibility cannot be completely delegated.

Beyond insurance, there are liability mechanisms within the subcontracting chain. SECO explains, in the context of joint and several liability, that the contracting contractor must require its subcontractor to provide documentation demonstrating compliance with minimum working conditions and wages, and must include contractual measures (including regulations governing cascading subcontracting). (SECO, “Joint and Several Liability”).

Even if your objective here is insurance, the governance message is the same: no site access without documents and clauses.

Operational objective: to reduce uncertainty at the time of the disaster

Demanding insurance clauses isn't just for show: it's to guarantee that, when you have to make a claim, you have:

• a clear perimeter (activity and construction site covered)

• an identifiable insurer

• notification and cooperation obligations

• a ready file (evidence)

2) The minimum requirements: insurance and certificates

Here, we are talking about “basic” requirements before discussing extensions. These vary depending on the subcontractor's role, but some points are almost always present on construction sites.

Accident insurance (LAA): the mandatory thing to check

Accident insurance under the Federal Law on Accident Insurance (LAA) is mandatory for employed persons in Switzerland; the Federal Office of Public Health (FOPH) specifies that everyone employed in Switzerland is compulsorily insured against occupational accidents and illnesses, and that beyond a certain weekly working time, coverage extends to non-occupational accidents. (FOPH, “Accident Insurance: Who is Compulsorily Insured?”).

Suva confirms the principle: workers in Switzerland are compulsorily insured by their employer against accidents and occupational diseases. (Suva, “Accident Insurance according to the LAA”).

What you require: a valid LAA certificate, consistent with the actual employer of the people who will be entering the site.

Corporate civil liability (RC): damages to third parties

Business liability insurance covers damages caused to third parties in the course of business. A Swiss insurer summarizes the essentials: if business activities cause damage to third parties, the insurer pays compensation for covered events and defends against unjustified claims. (Zurich, Switzerland, “Business Liability Insurance”).

What you require: an up-to-date RC company certificate, with declared activity compatible with the assigned lot (structural work, building technology, finishing work, etc.).

Construction insurance / all-risks site insurance: to be distinguished, not confused

Depending on the project's organization, construction insurance (or all-risks construction insurance) can cover material damage related to construction accidents, including "own damages" often excluded from the liability insurance of those involved. (Zurich, Switzerland, "Construction Insurance").

Practical point: you do not necessarily require it from each subcontractor if the project owner or the general contractor bears it, but you must require consistency of responsibilities and cooperation in the event of a disaster (declaration, evidence, safeguard).

Project owner liability insurance: if you are on the owner/client company side

Whenever there is a neighboring property, public access, or risk to third parties, the project owner's liability insurance becomes a cornerstone of project management. Many third-party claims originate there and are then distributed among the various stakeholders. (Zurich, Switzerland, "Construction Insurance").

What you require from subcontractors: contractual consideration (obligation to announce, to collaborate, to assume deductibles and attributable damages according to responsibilities).

3) Insurance clauses to demand: what must be clearly stated in writing

Objective: to avoid grey areas. We are not looking for the perfect clause, we are looking for a usable clause.

Clause 1: Obligation to provide certificates before and during the construction work

Expected content:

• submission of up-to-date certificates (LAA, RC entreprise, and others depending on the role)

• Access to the construction site is prohibited without documentary validation.

• automatic renewal obligation (certificate updated upon expiry)

Suva insists on the need to examine the documents of subcontractors in the construction industry. (Suva, “Occupation of subcontractors”).

Clause 2: Declared scope of activity and consistency with the lot

Expected content:

• The subcontractor guarantees that the work carried out on the construction site corresponds to the work performed.

• obligation to announce changes (technical, methodological, cascading subcontracting)

Why: a liability insurer may refuse if the activity actually carried out is not declared or if the risk is materially different.

Clause 3: Insured status and waivers (to be handled methodically)

Depending on the project, you can request:

• inclusion of the project owner/general contractor as an “additional insured” for damages caused by the subcontractor (if accepted by the insurer)

• waiver of subrogation between parties, when it makes sense within the construction site's insurance structure

Governance considerations: these points are highly contractual and dependent on insurance conditions. Your goal is consistency, not accumulation.

Clause 4: Claims notification and cooperation

Expected content:

• obligation to immediately report any event likely to generate a claim

• obligation to preserve evidence (photos, documents, samples, deposited items)

• obligation to cooperate in expert assessments and contradictory findings

This is the clause that transforms an incident into a defensible case.

Clause 5: Cascading subcontracting subject to authorization

SECO emphasizes the importance of contractually framing any potential subcontracting to a second and third subcontractor and obtaining contractual guarantees. (SECO, “Joint and Several Liability”).

Insurance transposition: no "invisible" subcontractors. Every entity that works must be identified, insured, and validated.

Clause 6: Critical exclusions to be declared, and compensatory measures

Examples of sensitive areas that need clarification beforehand:

• damage to entrusted, cared-for or worked-on items (often subject to conditions)

• own damages (recoveries) versus damages to third parties

• work involving particular risks (fire, waterproofing, drilling, earthworks) sometimes requiring procedures or extensions

You don't need to list all the exclusions, but you must identify the exclusions "that cost you a construction project".

Control panel (simple, without uprights)

Requirement	Clause to be inserted	Document to be required	Who approves it internally?
Accident (LAA)	Access prohibited without a valid permit	LAA certificate of actual employer	HR / admin
Damage to third parties	Business liability insurance required and compatible activity	Liability insurance certificate + insured activity	Management / CFO
Disaster during construction	Immediate notification and preservation of evidence	Signed declaration procedure	Project Manager
Cascading subcontracting	Prior authorization + same requirements	List of subcontractors + certificates	Management / Legal Counsel
Renewal	Obligation to update at each deadline	Up-to-date certificates	PMO / admin

4) Two mini-case studies: what happens if you don't lock

Mini-case 1: “OK field” subcontractor, unclear LAA file

Context: A subcontractor arrives with a “flexible” team. The documents are incomplete, and the actual employer of the people is unclear.

Risk: in case of an accident, you lose critical time, you expose your construction site to blockages, and you find yourself rebuilding the subcontracting chain.

Decision and method:

1. Piloting: no access without LAA certificate aligned with the actual employer. (OFSP LAA; Suva LAA).

2. Document: list of names of people announced by the company, and correspondence with the certificate.

3. Follow: check at each team change.

Mini-case 2: damage to a neighbor, everyone "passes the ball"

Context: work causing damage to a third party (neighbor). The subcontractor says "it's the site liability insurance", the general contractor says "it's the subcontractor's liability insurance".

Risk: delayed repairs, conflict, escalation.

Decision and method:

1. Project management: pre-construction, claims cooperation clause, immediate notification, and clear articulation of third-party liability versus construction insurance. (Zurich company liability; Zurich construction insurance).

2. Documentation: joint report, photos, site log, work order, presence of stakeholders.

3. Follow-up: an internal case manager, a single channel with insurers/brokers.

5) Guidelines and checklist

Reference points

1. A certificate is not coverage: it proves the existence, not the quality, of the scope. Have the insured activity and the project in question confirmed.

2. LAA first, RC second: on construction sites, the “minimum vital” is to know that the people employed are insured in accordance with the LAA framework. (FOPH; Suva).

3. Cascading subcontracting = multiplied risk: contractually regulate and document the chain. (SECO).

What needs to be documented (boxed text)

• Signed subcontracting agreement + “insurance requirements” appendix

• Valid LAA certificate (actual employer)

• Company liability insurance certificate (compatible activity)

• If applicable: proof of construction insurance/coordination with site insurance policy, or confirmation of coverage via the project structure

• List of people authorized to enter the construction site (updated)

• List of tier 2 and higher subcontractors (if authorized) + same documents

• Claims procedure: who notifies, to whom, within what timeframe, and what documents are required?

• Site log (attendance, incidents, dated photos, modifications)

Pre-construction checklist

1. Certificates received, valid, and consistent with the batch and the employer

2. A "no access without validation" clause is integrated and enforceable.

3. Claim notification clause + retention of evidence signed

4. Cascading subcontracting: written authorization + required documents

5. Appointed internal manager (management/CFO/project manager) and central register of certifications

6) Common mistakes and how to avoid them

1. Simply accepting a generic liability insurance certificate

Avoid: accepting a certificate without verifying the activity provided.

To do: demand consistency in “site lot activity” and obligation to announce any changes.

1. Not checking the LAA on the actual employer

To avoid: documents in the name of one entity, people from another.

To do: systematic check, as accident insurance is mandatory under the LAA. (FOPH; Suva).

1. Allow the cascading subcontracting to happen “on the ground”

To avoid: discovering a rank 3 at the time of the disaster.

To do: prior authorization clause and identical requirements, in line with the contractual measures recalled by SECO.

1. Discover the exclusions at the time of the problem

Avoid saying: “we’ll see with the insurer”.

To do: short list of critical exclusions to clarify beforehand (own damages, things worked on, risky work).

1. Do not centralize the evidence

Avoid sending certificates and photos to email inboxes.

To do: single register of “subcontractors” (documents, dates, validator, history).

Questions to ask your insurer/broker (10 questions)

1. What minimum requirements do you recommend per type of lot (structural work, technical work, finishing work) and why?

2. Which liability exclusions are the most “blocking” on construction sites, and which extensions are realistic?

3. How to coordinate the liability of stakeholders and construction insurance to accelerate restoration? (Zurich construction insurance).

4. What elements must be included on an “acceptable” certificate (activity, validity, insurer, scope)?

5. What should be checked as a priority on the LAA of subcontractors and their teams? (FOPH; Suva).

6. In what cases is an “additional insured” required and what are the practical limitations?

7. In what cases should a waiver of recourse be requested, and what risks does this create?

8. What claims reporting procedure do you recommend (documents, reports, chronology)?

9. How to secure cascading subcontracting (clauses, documents, controls) while remaining operational? (SECO).

10. How to structure a document register that is sustainable in operation (updates, controls, audits)?

Conclusion

Requiring insurance clauses from subcontractors before they begin work on a site transforms a diffuse risk into a manageable one. The method is sound: manage (clear requirements), document (certificates and evidence), and monitor (renewal and subcontracting chain). Next step: integrate these clauses into your contract templates, implement a single document register, and conduct a rapid audit of your ongoing projects to identify any gaps in coverage before an incident reveals them.