What Happens When a Subcontractor Messes Up the Job?

When a subcontractor messes up a job, you are responsible to the client - not the sub. The contract is between you and the client. That is how construction arbitrage works: you win the work, you own the delivery, and you are the one the client holds to account. That is not a flaw in the model - it is the business. The question is how to handle it correctly so you fix the problem, keep the client, and recover your costs from the sub who caused it.

Why you are on the hook, not the sub#

The client hired you. They paid you. They have a contract with you. The sub is your supplier - the client has no direct contract with them and no easy legal route to pursue them. So when the tiler chips the stone, the plumber leaves a slow leak, or the renderer cracks before the paint even dries, the client calls you.

This is true in every jurisdiction. Whether you are operating in the US, the UK, Australia or Canada, the general contractor bears liability to the client for the quality of work performed by anyone on the project. Courts in all of these markets consistently hold the main contractor responsible for subcontractor defects - the sub's mistake does not transfer the client relationship away from you.

What you can do is recover from the sub. But the client conversation has to happen first.

Step one: respond to the client the same day#

The moment a defect complaint lands - by phone, email or on-site inspection - acknowledge it that day. Go and see it yourself. Do not send the sub back unsupervised as your first move. Do not write a defensive email asking for photos. Go to the site, look at the problem, and tell the client you are taking responsibility for resolving it.

That conversation - fast, direct, no deflection - is what preserves the business relationship in nine out of ten cases. Clients who feel heard and handled quickly almost never escalate. Clients who feel ignored or bounced around find solicitors.

Step two: notify the sub in writing#

Once you have seen the defect, notify the sub in writing - the same day or the next morning. The notice needs to do three things:

• Name the defect precisely (what, where, the extent of the problem)
• State that this falls within the defect liability period of the subcontract
• Give them a reasonable deadline to return and fix it (48-72 hours for a minor issue; agreed timeline for anything structural)

Keep this in writing. A WhatsApp message that names the problem and sets a deadline is better than a phone call. Email is better than WhatsApp. The written record is what protects you if this escalates to cost recovery.

Step three: use the subcontract to get them back#

If your subcontract is worded correctly, this part is straightforward. A proper subcontract contains:

A defects liability clause - an agreed period (commonly 12 months from practical completion of their work) during which the sub is obligated to return and correct defects at their own cost, at whatever time you reasonably request. In the UK this mirrors the defects liability period used in JCT contracts, typically 12 months. In the US, most subcontracts specify one year from final acceptance of the work.

An indemnification clause - if the sub refuses to fix their defect and you have to hire someone else to correct it, this clause makes the sub liable to reimburse you for those costs.

A retention holdback - typically 5-10% of the sub's total payment, held until the defect period expires. If the sub refuses to engage with a defect, you deduct the repair cost from the retention before releasing it.

If you did not get a written subcontract on this job, that is the lesson. The retention, the defect period, and the indemnification clause are the three tools that make cost recovery straightforward. Without them, recovery is possible but harder - you are arguing verbal agreements instead of written terms.

Read What Contracts Do You Need? for the minimum clauses every subcontract needs before the job starts.

Step four: know when to involve insurance#

Your general liability insurance covers you for third-party property damage and bodily injury caused by your operations - including work performed by your subcontractors. The standard CGL policy includes what is called the subcontractor exception: the "Your Work" exclusion, which would otherwise limit coverage on work you did yourself, does not apply when the defective work was performed by a sub. This is a significant protection, and it was built into ISO standard form CGL policies specifically because subs are the main source of defect claims on main contractor accounts.

What general liability does not cover is the cost of redoing the sub's actual work - that is a contract dispute between you and the sub, handled through the indemnification clause. Insurance covers consequential damage: the water leak that damaged the client's kitchen floor, the tile that fell and cracked a worktop, the electrical fault that caused a fire.

Require every sub you use to carry their own certificate of general liability insurance, with you named as additional insured. If a sub's work causes serious damage, their policy is the first defence. Yours is the backstop.

For the full picture on what cover you need in this business, see What Insurance Do You Need for Construction Arbitrage?

When the sub refuses to fix the defect#

This happens less than you would expect if you vet properly and pay fairly, but it does happen. The sequence:

1. Send a written notice with a firm deadline. Make clear that if they do not attend, you will hire a third party and deduct the cost from retention or pursue them for the overage.
2. If they miss that deadline, get a quote from an alternative sub to fix the defect.
3. Deduct the cost from retention. If the retention is insufficient, you have a small claims or civil court action, using the written notice trail as your evidence.

The practical reality is that most subs comply with a defect notice when it is in writing and they know you hold retention. The retention holdback is not bureaucracy - it is your enforcement lever. Without it, you are asking nicely. With it, you are managing a contract.

What this looks like in practice#

A real example from my own jobs: a plasterer I used early on left a wall with hairline cracks throughout the main bedroom of a residential renovation. The client called before the decorator had even started. I went to site that afternoon, agreed it needed to come off, and notified the plasterer in writing that evening. He came back two days later, removed the problem section, and re-skimmed it. Cost to me: half a day's oversight time. Cost to the client: a three-day delay. The relationship held because I owned it immediately.

The jobs that go badly wrong are almost always the ones where the main contractor tried to manage the client's expectations downward instead of managing the sub's performance upward. That is backwards.

The upstream fix: vet before you need it#

The real protection against subcontractor mess-ups is built before the job starts. A sub who has been referenced, tested on a small job, and knows you check their work closely is far less likely to cut corners than one you hired off a listing the morning of the job.

The full vetting process is in How to Vet Subcontractors Before You Give Them a Job. Run that process on every trade before you use them on a real client job. Your sub bench is your quality control system - it is not an address book.

Construction arbitrage works because the main contractor model is sound. Part of owning that model is owning defects when they happen, moving fast, and having the contracts in place to recover your costs. The sub did the bad work; you fix the client relationship and use the contract to settle accounts with the sub. That is the job.

For a full picture of the other risks this business carries and how to manage them, see What Are the Risks of Construction Arbitrage?

Last checked: 24 July 2026.