It is crucial for any contractor, or subcontractor for that matter, to make sure all the parties down the contractual chain have appropriate insurance coverage in place. A party may be responsible for the acts or omissions of parties below it. The responsibility not only flows up the chain to the project owner; in most jurisdictions it can extend down the chain to the employees of subcontractors.

In the first case reported this week, a prime contractor obtained a certificate of workers’ compensation insurance from a subcontractor. The certificate form was incomplete. An employee of the subcontractor was injured on the job. It turned out the sub had no workers’ compensation insurance to cover the loss, and the prime contractor was on the hook for the benefits. The prime argued that its reliance on the certificate form – albeit incomplete – relieved it of responsibility. The matter went all the way to the South Carolina Supreme Court.

Other cases reported this week involve a subcontractor’s payment claim against a prime contractor and an equipment lessor’s lien filing deadline. A North Carolina court considered whether a statute of limitations started to run on the sub’s claim when the prime allegedly made partial progress payments. Or, did the statutory period commence only after the project owner’s final payment to the prime contractor? And, an Ohio court addressed whether unauthorized use of equipment could extend an equipment company’s lien filing deadline.