The first step is to have a legally binding contract that identifies the responsibilities of the subcontractor, that clearly states time-bound tasks to be completed and the allocated budget for each task.
As a contractor looking to hire a subcontractor, you can specify exactly what type of insurance is required. Then, check the insurance certificates of your subcontractors to validate that they, in fact, have the appropriate types of insurance. The insurance certificate lists the policies a contractor has, the coverage amount, limits, and relevant expiration date.
Ensure that your subcontractors have the appropriate licenses for their type of work. You can request copies of the license, or there may be some way to directly check with the licensing bodies. The insurance contract requires that sub-contractors be licensed, so validating licensing is critical to fulfilling your insurance requirements.
A ‘bonded’ contractor is on that has a permit bond. This bond ensures that the contractor will adhere to the building code and safety guideline requirements as set by law. If the contractor fails to produce work that complies with these laws, you can seek damages against the bond.