Red Phone Icon 905-274-5678
A subcontractor installing drywall in a private property


March 25, 2024

The Pros and Cons of Being a Subcontractor

If you are still on the fence about starting your career in the trades, one thing that can help you decide is weighing the pros and cons of being a subcontractor.

Generally, two of the top benefits of being a subcontractor and why many people choose this profession are personal and financial freedom. The downside? Subcontractors are often not covered by the employer’s insurance and therefore lack the benefits of a full-time employee.

In this article, we’ll explore the pros and cons of being a subcontractor to help you understand what to expect should you enter this line of work.

A general contractor and subcontractor work on a building plan together

Image source: Canva

The Benefits of Being a Subcontractor

A flexible work environment, the opportunity to gain experience in a variety of trades, and the potential to earn more money are just some of the benefits of being a subcontractor.

Flexibility in Scheduling

Independent contractors often enjoy greater control over their work schedules compared to traditional employees. This flexibility allows for a better work-life balance, as subcontractors can choose when and where they work, adapting their schedules to fit personal commitments and preferences.

Choice of Projects

One of the benefits of being a subcontractor is that it allows you to select projects that align with your skills, interests, and career goals. This choice can lead to higher job satisfaction and motivation, as you are not bound to a single employer or type of work, enabling you to diversify your experience and expertise!

Potential for Higher Earnings

When you’re self-employed, there’s a common misconception that you earn less than a full-time general contractor. However, this is a myth.

By managing multiple clients and projects, subcontractors can negotiate their rates and take on additional work as capacity allows, optimizing their income based on their workload and efficiency.

Read more: How to Become a Subcontractor In Ontario

Professional Growth and Independence

Working as a subcontractor fosters a strong sense of independence and entrepreneurship. It encourages continuous learning and adaptation as you manage different aspects of your company, from business administration to client relations to financial management and project execution.

Consider honing in on a set of specialized skills, like plumbing or carpentry. Being a specialist, especially one that’s Red Seal certified, is a huge advantage. Clients looking to hire subcontractors are more likely to want to work with you if you have national recognition for your specialized skill set.

The Disadvantages of Being a Subcontractor

While having multiple income streams from various projects is enticing, self-employment is far from easy.

Inconsistent Work and Income

Independent contractors can have a full schedule for weeks and then have to wait for days or months to get another job—it all depends on the seasonality of your work, your personal network, and your bidding strategies for projects. The job opportunities for subcontractors are heavily reliant on construction managers, which can also lead to accepting work for lower pay rates or working in unfavourable conditions.

Increased Liability and Risk

Subcontractors are usually responsible for their own legal and financial risks. Without the backing of a larger organization, they must handle any legal issues, disputes, or accidents independently, which can be daunting and potentially ruinous without appropriate insurance and legal support.

Lack of Employee Benefits

Unlike full-time employees, a freelance subcontractor typically does not receive employment benefits such as health insurance, paid leave, or retirement plans. This means they must manage and fund these necessities on their own, which can be costly and complicate long-term financial security.

However, any subcontracting business or self-employed person has options when it comes to protecting their livelihood…

An unfinished building under construction

Image source: Canva

Avoiding Risks and Liabilities With Insurance

In the discussion of the pros and cons of being a subcontractor, managing risks and liabilities is crucial. Various hazards are inherent to your profession—whether that’s third-party injuries, property damage, or stolen tools and equipment. All these factors can harm your business and even cause financial strain.

If you’re working as a subcontractor you must protect your assets with a comprehensive insurance policy tailored to your subcontracting work.

Insurance not only provides a safety net against accidents, injuries, and litigation but also enhances credibility with clients, showing preparedness and professionalism. It’s an essential strategy for subcontractors to protect themselves from the high costs of damages and claims that could otherwise jeopardize their business.

By investing in the right insurance policies, subcontractors can focus more on their work and less on the financial risks associated with their projects!

How Contractors Insurance Can Help

As one of Ontario’s leading commercial insurance brokerages, Contractors Insurance is the expert in curating personalized insurance plans for general and independent contractors.

Our insurance bundles are tailored to the unique risks you face as an independent contractor, ensuring your investments and future business goals remain protected. We’ll show you the ropes when it comes to your policy’s limitations, coverage, and exclusions. You can count on us to be transparent and ready to lend a helping hand at all times.

Knowing your finances are safe can help you navigate the pros and cons of being a subcontractor with ease. Contact us today to get a free quote!


Leave a Reply

Required fields are marked *

Leave a Comment

Get Contractors Insurance.
Get Peace of Mind.
Get to Work.