Which insurance is essential for protecting against subcontractor failures?

Subcontractor default insurance is specifically designed to protect contractors from the financial repercussions that may arise when a subcontractor fails to fulfill their contractual obligations. This type of insurance addresses the risks associated with subcontractor performance issues, such as failure to complete work on time or not meeting the required quality standards. By having subcontractor default insurance, a contractor can recover costs associated with hiring another subcontractor to complete the work or any additional expenses incurred due to the default.

The other types of insurance mentioned serve different purposes. General liability insurance protects against claims of bodily injury or property damage arising from the contractor's operations. Workers' compensation insurance provides coverage for employees injured on the job, ensuring they receive medical benefits and compensation for lost wages. Professional liability insurance, also known as errors and omissions insurance, protects professionals against claims of negligence or failure to perform their professional duties competently. While these insurances are important for overall risk management, they do not specifically address the unique risks associated with subcontractor failures, making subcontractor default insurance the essential choice in this context.