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Insight · Subcontractors

Vetting a subcontractor
before you instruct them.

Nine checks, what each one is actually protecting you from, and the two that firms skip and then discover matter. Most of it is twenty minutes and free.

Published ·6 min read·Written by Unibuild

Nine checks before you instruct anybody: public liability insurance, employers' liability, CIS verification with HMRC, competence and cards, scheme accreditation, RAMS for the activity, right to work, references from firms like yours, and a basic financial check. Two of them carry expiry dates, and those are the two that actually cause the losses.

What you are actually protecting against

Vetting is usually treated as a form-filling exercise imposed by somebody upstream. It is worth being clear about what each check is really for, because that determines which ones you can be relaxed about and which you cannot.

Three distinct exposures. There is the uninsured loss: somebody is injured or something is damaged, the subcontractor cannot pay, and the claim comes to you. There is the regulatory exposure: under CDM 2015 you have duties about the competence of who you appoint, and under CIS you have obligations about how you pay them. And there is the commercial exposure: they take your money, or your client's programme, and do not finish.

Different checks answer different ones, and firms tend to be thorough about the paperwork that gets audited and casual about the one that costs the most.

The nine

  1. Public liability insurance. Check the certificate, the limit of indemnity, the named insured, and the expiry date. The limit matters: a £1m policy on a job with £5m of adjacent property is not cover, it is a gesture. Confirm the named insured is the entity you are actually contracting with rather than a related company or a sole trader with a similar name.
  2. Employers' liability insurance. Compulsory where they have employees, with a minimum of £5m under the Employers' Liability (Compulsory Insurance) Act 1969. A genuine one-person limited company with no employees may not need it, and that is worth confirming rather than assuming in either direction.
  3. CIS verification. Verify them with HMRC before you pay them, not after. Verification returns the rate you must deduct at: 20% for registered subcontractors, 30% for those who cannot be verified, and nil for those with gross payment status. Paying at the wrong rate is your problem, not theirs, and the deduction comes off the labour element rather than the whole invoice.
  4. Competence and cards. CSCS or the equivalent scheme for the trade, plus any activity-specific competence: CPCS or NPORS for plant, Gas Safe registration, an electrical competent person scheme, IPAF or PASMA for access. Card schemes are not law, but appointing an incompetent contractor is a CDM 2015 failing and the card is the ordinary evidence.
  5. Scheme accreditation. SSIP member schemes such as CHAS, SafeContractor, Constructionline or SMAS. The value is the mutual recognition arrangement: an assessment by one member scheme is generally accepted by another, which is what stops a subcontractor being assessed from scratch for every chain it joins.
  6. RAMS for the actual activity. Not a folder of generic ones. The test is whether it describes this work, on this site, in the sequence it will really happen. If it could have been written for any job of that type, it will not survive the first question an inspector asks, and the standard is set out in RAMS that hold up.
  7. Right to work. Where you are engaging individuals, the statutory checks apply and the penalties for getting it wrong are civil and potentially criminal. Where you are engaging a company, the duty sits with them for their own people, and your protection is a contractual obligation that they carry it out.
  8. References, from firms like yours. Two, and ask a specific question rather than a general one. Not whether they were any good, but whether they finished, whether the final account matched the order, and whether they would use them again on a job with a tight programme. The useful answers come from the hesitation, not the words.
  9. A basic financial check. Twenty minutes on Companies House and the judgment register. A subcontractor that fails mid-package costs you the programme, the remobilisation and often the difference in rate to the replacement. The method is the same one you would run on a client, and it is set out in credit checking the firm above you.

The two that actually cause the losses

Every one of those nine gets done at onboarding, because onboarding is when somebody has a form open. Two of them then expire.

Insurance runs annually. Scheme accreditations run annually. A subcontractor onboarded in March with twelve months of cover is uninsured from the following March if the policy lapses, and nothing about your file changes on that day. The certificate you hold is still a valid certificate. It is just describing a period that has ended.

The failure mode is entirely ordinary and it is not anybody being dishonest. The subcontractor changed broker, or the renewal fell due during a bad month, or the policy renewed at a lower limit than the one you approved. Meanwhile they are still on your site, on a job you are still running, and the position that would be relied on if something happened is not the position in your folder.

The expensive gap is almost never the check nobody did. It is the certificate that was correct on day one and expired in month four.

Which means the real question is not what you collect but what watches it. If the answer is a spreadsheet somebody remembers to open, the answer is nobody. Expiry dates need to sit against the subcontractor record and produce a prompt without anybody deciding to look, and a firm that cannot tell you today which of its live subcontractors has cover lapsing this month does not know its own exposure.

Proportion, and not making enemies

A word against overdoing it, because the research is consistent that reliable subcontractors are the scarce resource and the firms that get them are the ones that are straightforward to work for.

Ask once, ask for everything at the same time, and do not ask again for things you already hold. Sending a subcontractor four separate emails over three weeks, each requesting one document, is how a good firm decides your competitor is easier to deal with. Give them a single list, accept documents in the format they already have, and tell them exactly when they will be paid. That last one does more for your access to good trades than any part of the vetting pack.

Scale it to the exposure, too. A £4,000 package and a £400,000 package do not need the same file. What both need is insurance that is current and a rate you have verified.

Where this touches the platform

This is close to the centre of what Unibuild does. A subcontractor is held as a record with its orders, its insurance position and its documents against it, and the insurance currency is shown against the firm before you instruct them again, which is the check most likely to be out of date at the moment it matters. Expiry tracking is a module rather than a habit, so a certificate coming to its end produces a prompt instead of waiting to be noticed. Orders carry their terms as structured fields printed on page one, so the payment terms and retention are captured at award rather than argued later. What it does not do is verify anybody with HMRC or read the insurance market for you: it holds what you collected, watches the dates, and makes the position answerable in a minute rather than an afternoon.

Subcontractor management Compliance and certification Reminders and expiry The subcontractor portal

Where to start, on Monday

Do not start with the onboarding pack. Start with the subcontractors already on your sites, and answer one question about each: when does their public liability cover expire. Firms running this for the first time typically find at least one that has already lapsed, and finding it on a Monday is a great deal better than finding it in a claim.

Then fix the process rather than the instance. Whatever holds the answer has to produce it without somebody choosing to look, because the whole failure mode here is that nobody chooses to look at a job that is running fine.

Asked most often

The follow-up questions.

The CIS side of paying them is in the CIS deductions guide.

What checks should I do before hiring a subcontractor?+
Nine: public liability insurance, employers' liability where they have employees, CIS verification with HMRC, competence and cards such as CSCS, SSIP or equivalent scheme accreditation, RAMS written for the actual activity, right to work where you engage individuals, two references from firms like yours, and a basic financial check on Companies House and the judgment register.
Do I have to verify a subcontractor with HMRC?+
Yes, before paying them. Verification returns the rate you must deduct at: 20% for subcontractors registered under CIS, 30% for those who cannot be verified, and nil for those holding gross payment status. Deducting at the wrong rate is the contractor's problem rather than the subcontractor's, and the deduction applies to the labour element rather than the whole invoice.
How much public liability cover should a subcontractor have?+
Enough for the exposure on your job rather than a standard figure. The limit of indemnity is the number that matters, and a £1m policy on a site with millions of pounds of adjacent property is not meaningful cover. Also check the named insured is the exact entity you are contracting with, not a similarly named related company or sole trader.
Does a subcontractor need employers' liability insurance?+
Where they have employees, yes: it is compulsory under the Employers' Liability (Compulsory Insurance) Act 1969, with a minimum limit of £5m. A genuine one-person limited company with no employees may fall outside the requirement, which is worth confirming explicitly rather than assuming in either direction.
What is SSIP and do subcontractors need it?+
Safety Schemes in Procurement is the umbrella body whose member schemes, such as CHAS, SafeContractor, Constructionline and SMAS, assess health and safety arrangements. It is not a legal requirement, but its mutual recognition arrangement means an assessment by one member scheme is generally accepted by another, which is what stops a subcontractor being reassessed for every supply chain it joins.
What happens if a subcontractor's insurance expires mid-job?+
You have an uninsured contractor working on your site, and the certificate in your file is still a valid document describing a period that has ended. This is the most common expensive failure in subcontractor management, because nothing about your records changes on the day cover lapses. Expiry dates need to sit against the subcontractor record and produce a prompt rather than waiting to be noticed.
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