<iframe src="https://www.googletagmanager.com/ns.html?id=GTM-WCK3FXN" height="0" width="0" style="display:none;visibility:hidden" title="gtm-frame"></iframe>What’s the difference between BFSCs and LOSCs? | Trade Direct Insurance
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What’s the difference between BFSCs and LOSCs?

22 March 2021

Bona-fide subcontractors (BFSCs) are hired to complete a specific job, usually one that the main contractor and his employees cannot do. They work under their own direction, use their own materials and kit, and are responsible for their own liability insurance, health and safety arrangements, and compliance.

Labour-only subcontractors (LOSCs) work under the main contractor’s supervision and are usually hired when the main contractor needs extra employees for a job. They use the main contractor’s tools and materials and must be insured under the employing company’s employers’ liability policy.

Liability insurance - what you need to know

If one of your employees is injured or becomes sick as a result of their work - then employers’ liability insurance is designed to protect you against claims they may make against you for negligence. Employers’ liability insurance is a legal requirement if you employ people, and that includes labour-only contractors.

Bona-fide subcontractors, however, are not classed as employees as they work under their own supervision and direction, so you don’t need employer’s liability insurance for them.

Public liability cover should be considered for anyone who works for you or on your behalf. Bona-fide subcontractors should have their own Public Liability cover. However, if they do not, and they cause damage or injury to a third party or their property while working, the liability would fall back to your insurance policy. It is vital to check that a bona-fide subcontractor has their own liability insurance in place, for your own protection.

In Summary

Both LOSCs and BFSCs must be declared to your insurance provider. LOSCs will be classed as employees and both employers’ and public liability cover should be provided. BFSCs are not, and only public liability cover will be provided.  

Good business sense

Hiring a subcontractor at some point is common practice and is not without its benefits. You can lighten your workload, speed up the completion of a project and bring in a specialist – such as a plumber or electrician. Plus, it can be more flexible than employing a team member. It makes good sense to manage your risks and avoid compensation claims with a robust insurance policy.

For tradesman insurance, get a quote online, or if you would like to speak to somebody in more detail call 0800 0280 380.

Trade Direct is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent broker providing a wide range of policies to tradesmen and construction workers.

This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law.

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