Can Marine Contractors Insurance Provide Coverage for Subcontractors?

Marine construction projects often rely on subcontractors for specialized work such as dredging, welding, underwater inspections, and other technical services. With the global marine and ports construction market expected to reach $45.74 billion by 2027, these projects are only growing in scale and complexity. While these partnerships bring valuable expertise to a job site, they also raise important questions about liability. 

Understanding whether subcontractors are covered under a contractor’s existing marine contractors insurance policy — and under what circumstances — is critical to protecting against costly claims.

Understanding Subcontractor Roles in Marine Construction

Subcontractors play a vital role in marine construction, bringing specialized expertise that contractors may not have in-house. Common examples include divers, welders, barge operators, underwater inspection specialists, and crane service providers. 

Unlike employees, subcontractors operate independently, often bringing their own equipment and controlling their own work methods. But independent operations can create gaps in liability protection if they aren’t integrated into the contractor’s insurance plan or if the subcontractor’s own coverage is inadequate.

Key Coverages Under Marine Contractors Insurance

Marine contractors’ insurance consists of several coverage types that work together to protect against the unique risks of marine construction. 

• Marine general liability: Covers injury and property damage but may exclude subcontractor incidents without endorsement
• Marine contractors liability: Focuses on the contractor’s work, not subcontractors unless added
• Bumbershoot/Excess liability: Can cover subcontractors if underlying policies include them
• Contractor’s equipment (inland marine): Covers owned or rented equipment, not subcontractor gear
• Workers’ compensation and USL&H: Excludes subcontractors unless endorsed or required by contract
• Protection and indemnity: Applies to subcontractor vessel operations if ownership and control terms are met

Does Marine Contractors Insurance Automatically Cover Subcontractors?

Marine contractors’ insurance doesn’t typically provide automatic coverage for subcontractors. In most situations, they aren’t included unless the policy is specifically structured to do so. 

Whether coverage exists depends on the terms of the contractual agreement, the policy wording, any applicable endorsements, and whether the subcontractor is named as an additional insured.

Best Practices for Agents and Contractors Working with Subcontractors

Managing subcontractor relationships in marine construction requires a proactive approach to coverage and risk transfer. These precautions can help protect contractors, subcontractors, and project owners from costly disputes when incidents occur.

• Verify subcontractor insurance: Require proof of general liability, marine liability, and workers’ compensation.
• Use contractual risk transfer: Have subcontractors name the contractor as an additional insured.
• Policy review and endorsements: Consult with underwriters to determine if a blanket additional insured endorsement is appropriate.
• Keep documentation current: Maintain valid insurance certificates and signed agreements.
• Clarify indemnity agreements: Define responsibilities for losses before work begins.

When To Recommend Tailored Coverage or Policy Modifications

Specialized coverage is worth recommending if subcontractors are used regularly for high-risk or large-scale projects. It’s also warranted if: 

• If work is performed in jurisdictions with strict liability laws
• When project owners mandate inclusion in the contractor’s policy
• If subcontractors perform hazardous work like underwater welding or blasting using drones 

Guiding Clients Toward Comprehensive Subcontractor Coverage

Subcontractor exposure is a major consideration in marine construction risk management. While marine contractors’ insurance can be structured to cover subcontractors, it requires careful attention to policy language, endorsements, and contractual agreements. By proactively reviewing insurance programs and contracts, agents can help their marine contractor clients operate with full protection.

Merrimac Marine has extensive experience in structuring marine contractors’ insurance to address subcontractor exposures. With access to admitted and non-admitted markets, we can craft flexible underwriting solutions, assist with risk transfer language, and even secure additional insured endorsements.

Contact Merrimac Marine Insurance today to learn how you can help your clients navigate subcontractor coverage challenges.

About Merrimac Marine Insurance

At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ businesses and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.