TRUST YOUR GUT: Bonus Chapter, Stop Letting Subs Risk Your Business

Your subs can make or break you. In this bonus chapter, Karalynn explains why every subcontractor needs their own written agreement, how to tie sub payments to owner approvals, and how insurance, additional insured status, and master subcontracts protect your reputation and your bottom line. Learn more about The Cromeens Law Firm here ! Grab Karalynn's new book Trust Your Gut here . Follow Karalynn Cromeens on Facebook here . Follow Karalynn Cromeens on Instagram here . Follow Karalynn Cromeens on LinkedIn here . Watch the show on YouTube here . Key Takeaways 1. Every sub needs a written subcontract that sets quality standards, insurance requirements, and owner‑approval‑based payment terms. 2. Make sub payment contingent on owner approval and your receipt of funds so you are not paying for unapproved or defective work. 3. Use subcontracts to clarify that subs and their workers are not your employees, and require them to carry their own workers' comp. 4. Add yourself as additional insured on subs' policies and use a master subcontract to standardize protections across all projects. Timestamped Overview 01:00 Explanation that the book has focused on homeowner contracts so far, but subcontracting is another major risk area where contractors are often exposed. 02:00 Practical reasons for subcontracts: defining the relationship, setting quality standards, confirming insurance, and requiring that subs' work meets plans and specs and is approved before they get paid. 03:00 Emphasis that subs extend your reputation, so you must communicate your standards and methods clearly and treat subs' work as a reflection of your company. 04:00 Payment terms section: your payment to subs should mirror your payment from the owner, and subs should not be paid until the owner approves their work and pays you. 05:00 Common scenario: sub wants payment even when the homeowner is unhappy or the work is not to spec, and how a clear contingent‑payment clause gives you leverage. 06:00 Legal reasons for subcontracts: reducing the risk that subs or their workers can claim to be your employees and sue you or the owner when injuries occur. 07:00 Explanation of workers' comp audits: without subcontracts, auditors may treat everyone you paid as employees and spike your premiums; story of a client facing a large audit bill that was reduced thanks to signed subcontracts. 08:00 Insurance strategy: requiring subs to name you as additional insured so you can file claims directly on their liability policy if their work causes damage. 09:00 Wine‑cellar flooding example where a sub set off sprinklers and caused major damage, and how being additional insured allow