When you put your name on the deliverable, the claim is yours. Your professional liability policy generally covers work performed on your behalf by others, but you carry the retention, the audit, and the reputational damage. Written agreements and certificates are what keep it manageable. Who this is for: Marketing and advertising agencies using freelance designers.
The short version
- The client sues you, not your subcontractor, because the contract is with you.
- Require professional liability from subcontractors at limits matching what your own clients demand.
- Collect certificates before the first invoice and keep them for years, not months.
- Disclose subcontracted revenue to your carrier. Silence becomes an audit problem.
- A freelancer who works only for you may be treated as an employee whatever the contract says.
The rule: you own their work
When you hire freelance designers, developers, photographers, videographers, and influencers and put your name on the deliverable, the client's claim comes to you. Your professional liability policy will generally cover you for work performed on your behalf by others, but it will do two things you should expect: it will pay your claim and then try to recover from the subcontractor, and it will charge you for their revenue at audit.
Four controls that actually work
- A written subcontractor agreement. A signed agreement with every freelance designers that includes an indemnity running to you, a requirement to carry their own professional liability, and a limitation on their subcontracting further.
- A certificate of insurance on file. Collect a certificate before the first invoice, with limits at least equal to what your own clients require of you.
- Continuity of their coverage. Confirm their policy is claims made and that they will maintain it for a period after the work ends, since a claim can arrive long after the engagement closes.
- Disclosure to your own carrier. Tell your carrier what portion of your revenue is subcontracted. Undisclosed subcontracting is a common audit and coverage problem.
What to require from them
| Coverage | Typical requirement for a agencie subcontractor |
|---|---|
| Professional liability | At least $1M per claim / $1M aggregate on a media and technology Errors and Omissions (E&O) form, claims made, maintained for two years after the engagement |
| General liability | $1M per occurrence, $2M aggregate, with you named as additional insured |
| Workers compensation | Statutory, or written proof of a valid exemption |
| Cyber liability | $1M where they touch client data or systems |
| Auto | Hired and non owned auto if they drive to client sites for you |
Freelancers and offshore teams
Two practical warnings. First, an offshore contractor is often uninsurable in a way you can verify, so your own limits become the only real protection and should be sized accordingly. Second, if a freelancer works only for you, on your schedule, with your tools, a state agency may treat them as an employee regardless of the contract, which affects workers compensation, payroll taxes, and your audit.
Related reading: do independent contractors need their own insurance.
What this looks like in practice
Illustrative example. Numbers are typical of claims we see and are not a promise of how any specific claim would be handled.
The setup: A agency that subcontracted part of an engagement to a specialist without collecting a certificate.
The claim: The matter started with a mis-set audience on a $220,000 media flight. The client claimed the entire spend was wasted and withheld fees while suing for the media cost.
The cost: $38,000 in defense costs and $130,000 in settlement, $168,000 in total, paid inside the policy limit after the retention.
The lesson: The client claimed against the firm, the firm's policy responded, and there was no insured subcontractor to recover from afterwards. A certificate collected at the start would have preserved that recovery.
Frequently asked questions
Q: Am I liable for a subcontractor's mistake?
Generally yes, when you put your name on the deliverable. The client contracted with you, so the claim comes to you and your policy responds first, subject to your retention.
Q: Does my professional liability policy cover work done by subcontractors?
Most forms cover work performed on your behalf by others, which is what you want. Confirm the wording, disclose subcontracted revenue at application, and expect it to be rated.
Q: What insurance should I require from a subcontractor?
Professional liability at least equal to what your clients require of you, general liability at $1M per occurrence with you as additional insured, workers compensation or proof of exemption, and cyber if they touch client data.
Q: Do I need a written agreement with a freelancer?
Yes. Without one you have no indemnity, no insurance requirement, and a weaker position if a state agency argues the person was really an employee.
Q: What about offshore contractors?
Treat their insurance as unverifiable and size your own limits accordingly. Also check that your policy has no territorial restriction that would matter if the work was performed abroad.
Q: Will using subcontractors raise my premium?
It affects the rating, since carriers look at subcontracted revenue as part of your exposure. Not disclosing it is far more expensive than the rating, because it becomes an audit and coverage issue.
How Morrow helps marketing and advertising agencies
Morrow is a licensed independent commercial insurance brokerage that specializes in marketing & advertising agencies. Setting subcontractor insurance requirements that hold up is exactly the kind of question we answer every week, and because we place this coverage every day we know which carriers write it well, which forms are broad, and which contract language actually needs an endorsement behind it.
- We read the contract clause and tell you what your current policy already does and does not do.
- We market your account to carriers that have real appetite for marketing and advertising agencies rather than whoever answers first.
- We issue certificates the same day a client asks, with the endorsements listed correctly.
- We stay on the file at renewal so limits, retroactive dates, and contract requirements do not quietly drift.
Get in touch and we will see how we can help. Tell us what you do, send over any contract that is driving the requirement, and send us the question and we will tell you where you stand. Start at morrowinsure.com or reach the team through the contact options on that page.
One more thing. This article is general information for marketing and advertising agencies and is not legal advice, tax advice, or a statement of coverage. Policy wording controls in every case, and forms vary by carrier and by state. Have a licensed advisor review your own policy and your own contract before you rely on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated August 2026.