Does PI cover work carried out by sub-contractors?

Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05

Sub-contracting is normal in surveying, engineering, IT, design, consultancy and construction-related professions. But it raises a fair question: if the mistake was made by someone you hired — not by you or your employees — will your professional indemnity (PI) insurance still pay out? The answer usually turns on who your client can sue, not on who physically did the work.

Why your PI policy usually responds

When a client engages you, the contract is between you and them. If you then pass part of that work to a sub-contractor, your client generally has no direct contractual relationship with that sub-contractor — so if something goes wrong, they come after you. You are the one who owes them a duty of care and a contractual obligation to deliver competent work.

Because your PI policy is designed to cover your legal liability for professional negligence, it typically responds to a claim even when the underlying error was made by a sub-contractor working on your behalf. Most standard UK PI wordings extend cover to work carried out by others for which you are legally responsible.

The key phrase to look for is that the policy covers claims arising from the conduct of your professional business, including work performed on your behalf by sub-contractors or consultants for whom you are legally liable.

When cover can fall away

Cover is not automatic in every scenario. It can be narrowed or excluded where:

• Your client contracts directly with the sub-contractor. If you merely introduce them and the sub-contractor invoices the client directly, you may not be liable — and your PI policy has nothing to respond to on your behalf.
• The wording requires the sub-contractor to hold their own PI. Some policies expect sub-contractors above a certain contract value to carry their own cover, and may reduce your protection if they don't.
• You've given a contractual guarantee or warranty beyond reasonable skill and care. PI generally covers negligence, not liabilities you've voluntarily assumed that go further than the common-law duty.
• The activity sits outside your declared business. If a sub-contractor performs work in a discipline you never disclosed to your insurer, a claim may not be covered.

Always read the definitions and conditions in your schedule. Two policies at the same limit can treat sub-contracted work very differently.

Your PI vs. the sub-contractor's PI

These are two separate lines of defence. Understanding which one bears the loss — and in what order — matters both for a claim and for your contracts.

This is why requiring your sub-contractors to hold their own PI is good practice. It gives your insurer a route to recover the loss, protects your claims record, and helps keep your own premium and excess intact.

Contract steps that keep you protected

Whether or not a claim is ultimately covered often comes down to how your contracts are written — both the one with your client and the one with your sub-contractor. Practical steps:

• Require sub-contractors to hold their own PI at a limit appropriate to the work, and see the certificate before they start. Set a minimum limit in writing.
• Use a written sub-contract that makes clear they are responsible for their own errors and indemnify you for losses caused by their negligence.
• Cap your own liability in the client contract to a reasonable amount — ideally aligned to your PI limit — subject to the Unfair Contract Terms Act 1977, which governs whether such limits are enforceable.
• Avoid giving guarantees or fitness-for-purpose warranties unless you understand that PI typically covers negligence, not absolute obligations. Keep duties to "reasonable skill and care" where you can.
• Tell your insurer how you operate. If sub-contracting is a regular feature of your business, disclose it. Non-disclosure of a material fact can affect a claim.

If you review or vary the wording of a contract that involves delegated work, it's worth checking your PI arrangements at the same time so the two line up.

A worked example

A consultancy is engaged to deliver a technical report. It sub-contracts the specialist modelling to an independent expert. The model contains an error, the client relies on it, and suffers a loss. Because the client contracted only with the consultancy, it sues the consultancy. Its PI policy responds to the claim, defends it, and pays any settlement up to the limit — then, if the sub-contractor had their own PI and a clear indemnity clause, the consultancy's insurer can pursue recovery. Had the sub-contractor invoiced the client directly instead, the picture could look very different.

Common questions

Do my sub-contractors legally have to hold their own PI?
There's no general legal requirement, but many professional bodies and client contracts insist on it, and it's strongly advisable. Requiring it in your sub-contract protects both parties and gives your insurer a recovery route.

Will covering a sub-contractor's mistake affect my premium?
A claim on your PI policy can affect your future premium and claims record, even where the error was a sub-contractor's. Ensuring they carry their own cover, so your insurer can recover, helps limit that impact.

Does my PI cover labour-only or one-off sub-contractors?
Usually yes, where you remain legally liable for their work, but limits and conditions vary by wording. If you use sub-contractors regularly or for high-value work, tell your broker so the policy is set up correctly.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.