Contractor vs Subcontractor

The construction industry is centered around contractors, from designing to building, remodeling to repairing, landscaping to interior design, and everything things in between. On any specific project, many of the individuals either work as a subcontractor or are Let’s begin.

Contractor vs. Subcontractor: What’s the Difference?

Contractors can be defined as a person or company that is hired to finish particular projects or can work being a freelancer. Usually, a contractor works obligated by an agreement to deliver services, labor, or materials to complete a project.

Subcontractors are firms or individuals that carry out work for contractors as a part of the larger contracted project. Subcontractors typically report only to the individual to which they have a contract with and rarely communicate with the client.

The main differences between contractors and subcontractors is in reference to chain of command and work flow. A subcontractor is a contractor that is hired (contracted) by other contractors.

But the basic relationship is pretty straightforward:

Owners employ (contract) contractors
Contractors employ (subcontract) subcontractors

In construction projects—from kitchen remodels to massive developments—an agreement is established between the owner of the property and one or more contractors. Those contactor(s) can then hire other workers, or other contractors, to facilitate in getting the project finished.

As a contractor, insurance is very important, however, by employing subcontractors, it is vital to remember that you disclose your business to more risk, which can be alleviated with additional contractors’ insurance.

General Contractor vs. Subcontractor

When securing a project, a contractor could accept ownership of all the work. In cases in which the contractor takes on full accountability, they are usually known as general contractors.

In these situations, the owners employ one contractor (the general contractor). All subcontractors usually work under the general contractor, and not the property owner.

Basically, here’s how the chain of command looks:

General Contractor

– This is the primary contractor on projects, employed by the property owner to completely oversee the project from start to finish. The general contractor is involved in some mixture of:

Performing the work directly
Hiring subcontractors and workers
Supervising the work of subcontractors and their own workers

Subcontractor

– Under the general contractor, they are typically employed for a specific portion of the job, usually associated with an area of skill. Depending on the project, subcontractors could be able to employ their own workers, or may use workers hired by the general contractor. Examples of subcontractors include:

A licensed electrician entrusted with all electrical work for a building
A demolition firm entrusted with demolishing and removing all debris from the property

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