Subcontractor Has Done work for me but its Faulty

[KissMeUnderTheMistleThrush]

I own a business and 2 years ago I was really busy so I asked another company if they could do some work for me, I know this other company and we see each other through work occasionally. They were happy to do the work and was all completed to the customers satisfaction.
Today I received a letter saying the work has been found to be substandard and has caused damage to property. The subcontractor is named but the letter came to me.
Who is liable to pay the insurance? Me or the subcontractor?

With who is the end customer's contract? (That's always a good place to start).

Thanks for your reply. I guess the customers contract is with myself, even tho I didn't do the work x

You are.

did you sue any due diligence on him?

so if I have an issue with a Kelloggs cereal box I bought from sainsbruys. The law is that Sainsbury’s refund or replacement and they Sainsbury’s would pursue with Kelloggs

Did you tell your customer it was a sub contractor?

You see the expectation is that whilst you physically didn’t do the work, who ever works on your behalf is delivered the same standard of service as you

Yes the customer was fully aware I was too busy and they accepted a subcontractor. The subcontractor is upset and ashamed that this has happened (the actual person who carried out the work is no longer employed by the subcontractor)
We are just wondering who the insurance claim will be against? Me or the subcontractor. For what it's worth, the subcontractor is a much bigger company than myself

Against you
and then you claim against sub contractor

You presumably had a contract with the subcontractor

your client did not

Did you do due diligence?
Did the sub con do work for other clients?

Odd that the client didn’t just go with the sub contractor directly?

Aww. Thank you for the ' x ' kiss. Made my sad day better.

We use subcontractors in my firm. Sometimes we need to bring in external experts and build the right team. Obviously this is presented as our own lead company, though the customer will know we have some subcontraction. So far nothing has gone wrong, but if it did we have done d/d on the subcontractors and retain evidence of their PI cover. Still, if client sues they sue us. We then counter sue. Each party has to mitigate losses, so we cannot just rest our laurels.

Focus on the cereal. The box is not that important.

@Zuffe sorry about the kiss🤣

I'm sorry that you're sorry. 😆

What I find odd is that the customer never contacted me about the fault. I assume they went straight to their insurer.
If they had contacted me I would have repaired the fault free of charge, presuming the fault was down to my/the subcontractors work.

Are your contracting arrangements as good as they could be? It sounds like you do something important but perhaps you don't have good paperwork in place??

Doesn't answer your question but helpful for looking forward

If the customer claims on my insurance and I then claim on the subcontractor insurance will my premiums go up?

Much depends on what you do and your industry structure. In financial services or medical / health, the ripples are very slow and yet potentially very wide. One has to mitigate losses.

If you are a baker and you baked a cake that went pear-shaped for the wedding organiser, the married couple will take it up with you on the basis of convenience. They both still had a good day and the photos proved it. they may not sue the organiser for that. But you owe them a free baptism cake and you not the wedding planner might choose to deliver it, for convenience.

The fact they have gone to your subcontractor, suggests to me that your business is independent of them. Perhaps think about what that might mean for future contacts.

Claim would go against you and then your insurer would try and pursue the subcontractors insurer.

I don't think anyone but your insurer can decide if your premium goes up.

Is it a very large claim?

The customer doesn’t claim on your insurance

you claim on your insurance

has your insurer accepted the claim?

its your choice whether or not you claim on your insurance. Presumably under professional indemnity? Public liability?

if you do, then yes your premiums likely will, especially if professional indemnity unless you can demonstrate that you did a damn fine job of due diligence and declares to your insurer that you sometimes sub contracted (most have a clause that you have to let them know if you are sub contracting)

It depends on your insurer but if there's building damage then probably

I'd check if your insurance even covers sub-contracted work

This
at the very least they will have imposed a condition that you notify the insurer first