chain liability is a clear example of this.
for companies working with subcontractors, partners or external service providers, it is essential to be prepared not only contractually, but also operationally and administratively for increasingly stringent control mechanisms.
since 1 January 2026, the duty of care has been further tightened. in sectors where intensive collaboration with (sub)contractors is common — such as construction and meat processing — legal responsibility within the execution chain continues to expand. this means that passive monitoring is no longer sufficient, and that companies should thoroughly reassess their internal controls and contractual arrangements.
regulations on chain liability stipulate that not only the direct employer can be held liable in cases of illegal employment, but also the client or main contractor within the same contractual chain.
this specifically concerns the employment of illegally residing third-country nationals: individuals who are not nationals of the European economic area or Switzerland.
for professional clients and contractors, this means that, under certain conditions, they can be held jointly responsible if a subcontractor employs workers without a valid residence or work permit.
in practice, we observe that this risk is still too often underestimated.
since early 2026, an explicit and reinforced duty of care applies. companies must now be able to demonstrate that they actively and systematically carry out controls within their collaboration chain.
simply relying on declarations from subcontractors is no longer sufficient. clients and main contractors are expected to effectively verify whether employment practices comply with applicable regulations, and to support this with a well-documented and structured file.
for high-risk sectors such as construction and meat processing, the likelihood of inspections and enforcement has increased significantly.
what is expected in practice?
the reinforced duty of care translates into a number of clear expectations:
- obtaining a written declaration from (sub)contractors prior to collaboration, confirming that no illegally residing third-country nationals are employed
- maintaining a structured file with identification and employment data of all involved parties
- verifying compliance with reporting obligations, such as the 30bis notification in the construction sector
- checking for social or fiscal debts at each invoice payment and applying withholding obligations where required
- reporting suspicious or missing information through the appropriate channels
- retaining all relevant documentation for at least 5 years
the burden of proof that these obligations have been met largely rests with your organization.
potential sanctions: more than an administrative risk
if illegal employment is identified and obligations have not been properly fulfilled, the consequences can be significant.
the law provides for both criminal sanctions and administrative fines, which are multiplied per affected employee. for companies operating multiple sites or projects, this risk may accumulate.
in addition to the financial impact, reputational damage and potential consequences for ongoing or future public contracts must also be considered.
chain liability is therefore not merely an administrative obligation, but a material business risk.
from a risk management perspective, chain liability is fundamentally a compliance and governance issue. it touches on internal controls, contractual arrangements, document management and directors’ liability.
at mawyc insurance, we therefore advise our corporate clients to:
- integrate social compliance into their contractor onboarding processes
- include clear indemnity and control clauses in contracts
- centralize and digitize documentation
- clearly assign internal responsibilities
- assess existing insurance policies for potential interaction with directors’ and general liability cover
a purely administrative approach is no longer sufficient. it requires an integrated approach in which compliance, contract management and insurance structures are aligned.
stricter regulations and increased enforcement mean that a passive approach is no longer defensible. thoughtful preparation and proper administrative follow-up are essential to protect your organization against severe financial and criminal consequences.
chain liability illustrates how compliance has become an integral part of sustainable and responsible business practices.
are you planning a new project, expansion or collaboration with (sub)contractors, either domestically or internationally?
we would be pleased to assess with you which preventive measures are appropriate and how to structure your risks correctly, both operationally and from an insurance perspective.
contact & questions
any questions? please feel free to contact your trusted contact person for further clarification or specific questions regarding risk analysis or prevention advice, or get in touch with us using the contact details below:
sources
- Pia Group – analyse ketenaansprakelijkheid en risico in bouw- en dienstensector
- International Labour Organization – richtlijnen rond arbeidsrechten en ketenverantwoordelijkheid
- Legal Direct, 22 februari 2026
- PWC risk & compliance insights - managing third-party risk in complex supply chains
- Deloitte legal & risk research - supply chain resilience and regulatory pressure in global operations
