Prime contractors and subcontractors sign contracts obligating them to defend, indemnify and insure the upstream contracting parties, owners in the case of prime contractors and the prime contractor in the case of subcontractors.
Sometimes where an owner blames a contractor for damages, multiple subcontractors are involved. In that case, the prime contractor appoints one defense counsel to defend the prime contractor in the dispute and the costs of defense of the prime contractor might be shared among the various subcontractors’ insurers.