Labour-only vs bona-fide subcontractors: the insurance difference

Updated 2026-09-14 · general information, not legal or insurance advice

“Subcontractor” covers two very different things for insurance, and the difference decides whose policy carries the risk — and whether a sub costs you money at renewal.

Bona-fide subcontractors

A bona-fide (genuine) sub runs their own business: they price the job, supply their own materials and plant, control how the work is done, and carry their own Employers’ and Public Liability. They’re responsible for their own cover, and a claim arising from their work sits with their insurer.

Labour-only subcontractors

A labour-only sub supplies mainly their labour, works under your direction and uses your materials — much closer to a temporary employee. For insurance purposes they’re usually treated as if they were your employee, so your Employers’ Liability is expected to cover them unless they can show their own.

Why it hits your renewal audit

At your renewal audit, payments to a labour-only sub who can’t evidence their own cover get added to your wageroll — and you’re charged premium on them. A bona-fide sub with valid cover is excluded. The same person can even flip category job to job, so the safe habit is: collect and keep current every sub’s certificate, whatever you call them.

More detail: do your subcontractors need Employers’ Liability?