Part of my job as general counsel is protecting a company from risk it doesn’t control but still ends up owning. And here’s the thing — the highest-risk matters are almost never the ones a company handles itself. They’re the ones it hands to somebody else and then has to answer for anyway.
Say your company doesn’t own heavy equipment. Or it can’t run a land survey in-house. So you bring in a subcontractor, hand them a work order, and set them loose to do the job — within the limits of the work order and the master services agreement, and within the independent contractor status both sides want to preserve.
Here’s the part that matters: once that subcontractor has clearance to start, the work is basically out of your hands. So how does the company protect itself when it’s not the one holding the tools anymore?
Two risks, not one
There are really two separate things you’re guarding against, and they call for different tools.
The first is failing to perform under your own contract with the client — because your subcontractor didn’t come through. The second is damage: to property, or to a person, that comes out of the subcontractor’s work while they’re doing it.
Protecting the client relationship
The subcontractor shouldn’t be able to walk away before the work is finished — that’s non-negotiable. Beyond that, it comes down to getting the basics genuinely right instead of just checking a box. The scope of work needs to say what it means, not leave room for a later argument about what was actually promised. There needs to be a real timeline, not a vague sense of “reasonable time.”
And consider a “time is of the essence” clause. It sounds like boilerplate, but it isn’t — it means missing the deadline is a material breach, not a technical one, which changes what you’re entitled to do about it. It’s the Sword of Damocles hanging over the subcontractor’s timeline. These clauses are often already sitting in the template and get negotiated out without anyone stopping to ask whether that deadline actually matters to your obligations to your client. Worth asking the question before you let it go.
Then there are professional standards. What you’re really doing is looking outward — to the local industry, to the profession the subcontractor belongs to — and setting the bar there instead of in your own head. That takes the subjectivity out of it. You’re not arguing about whether the work feels acceptable to you. You’re asking whether it meets what that industry expects of someone doing that job. That’s a much harder thing to argue your way around.
Protecting against damage to person or property
This is where three things matter, and skipping any one of them leaves a gap you won’t find until it’s too late.
Start with insurance. Actually look at what the subcontractor carries — don’t just take their word for it. And if they’re going to have access to your client’s confidential information, cybersecurity insurance needs to be on that list too. It’s the one people forget until it’s the one they needed.
Then indemnification. The clause needs three words, not two: defend, indemnify, and hold harmless. Everyone remembers indemnify and hold harmless. It’s “defend” people skip past, and it’s the most immediately impactful and practical piece — it means the subcontractor is on the hook to defend you while a claim gets sorted out, not just make you whole after the dust settles.
Then limitation of liability. Keep damages tied to actual damages — the same standard courts apply in civil litigation. Carve out consequential, special, punitive, and other economic-harm damages. That’s not fine print. It’s the difference between an exposure you can manage and one that doesn’t have a ceiling.
None of this means don’t use subcontractors. Most of the time you don’t have a choice, and the right one is the fastest way to get the work done. It just means the paper has to work as hard as the relationship does.
Senior Counsel. Plain Language. Fair Dealing.