Your subcontractor's insurance certificate shows their general liability coverage expired yesterday. What immediate action should you take?
Correct Answer
B) Stop work immediately until valid insurance is provided
Work must stop immediately when insurance coverage lapses, as this creates significant liability exposure for the general contractor and violates contract requirements and potentially permit conditions.
Why This Is the Correct Answer
When a subcontractor's insurance coverage expires, work must cease immediately to protect the general contractor from massive liability exposure. Continuing work with an uninsured subcontractor violates contract terms, potentially voids the GC's own insurance coverage, and creates personal liability for any accidents or damages. Most construction contracts and building permits specifically require continuous insurance coverage, making continuation of work a breach of contract and potentially illegal.
Why the Other Options Are Wrong
Option A: Increase your insurance coverage to compensate
There is no grace period for expired insurance coverage - allowing work to continue for any duration exposes the general contractor to unlimited liability and violates contract requirements and permit conditions.
Option D: Document the issue but allow work to continue
Increasing your own insurance coverage cannot compensate for or replace the subcontractor's lapsed coverage, and most insurance policies specifically exclude coverage for uninsured subcontractors' work and liabilities.
Memory Technique
Think 'STOP' - Subcontractor's insurance Terminated = Operations Prohibited. No insurance, no work, no exceptions.
Reference Hint
Florida Building Code Chapter 1, Section 105 (Permits) and Construction Contract Law sections covering insurance requirements
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