Ultimately, you are going to be liable for the work that was done on the project (if the homeowner has an issue, they can pursue you for the claim). You will have a right of indemnity against the subcontractor, but whether or not they are solvent, or have insurance is another issue.You can try to get information from the sub regarding their insurance information, this probably isn't a bad idea, but there really isn't a way to force them to provide this information after the fact. (Hindsight being what it is - and definitely for future contracting - it is best to get this information prior to contracting with them, and get it in writing).Be very careful in trying to withhold payment for services. What your subcontractor may try to do is place a mechanic's lien against the property (this wouldn't be a valid lien as they have no written contract
- but that doesn't necessarily mean your sub won't try one and harass your customer, creating further problems with your vendor
(Sears)). If you want to negotiate a resolution (your sub did breach their contract with you by only partially performing, and requiring you to complete the work, or pay for it in the form of reduced payment), you can try doing so through direct negotiations (which may even include requiring them to provide their insurance/contact information as part of your settlement
), or try using a mediator to help you settle the dispute.Unfortunately, lost profits due to the work are going to be a much harder claim here. While you are probably entirely correct on a practical perspective that this sub's shoddy workmanship caused you a decrease in profit, it is going to be very hard to press a legal claim against them. To protect yourself from this type of issue in the future, I would suggest being more aggressive at the front end and ensuring that your contractors are licensed and insured (working with the same subs routinely will help you reduce time in screening, but most insurance agencies can verify insurance with a single phone call). A business law, or construction law, attorney can usually provide you with a subcontracting agreement that meets your business needs for a small fee (you can find drafts available online and modify them to meet your business needs as well - this is not ideal, but it is far better than relying on text messaging).