According to the insurance hypothesis, more diverse plant communities are more likely to be resistant to drought. Whilst many experiments have been carried out to determine the effects of plant diversity on plant community insurance, the results are still contradictory. Here, we conducted a drought experiment where we tested whether the presence of subordinate species increases plant community insurance. In Swiss Jura grassland, we combined a removal experiment of subordinate species with a summer drought event using rainout shelters. Plant community composition was determined after the drought and based on biomass measurements; we estimated resistance, recovery and resilience of the plant community for each combination of treatments. Moreover, to assess drought impacts on water-use efficiency (WUE), we analysed carbon isotope ratios (13C values) in plant leaves of two dominants and two subordinates collected at the end of the drought period. We showed that subordinate species are more resistant to drought and increased community resistance by enhancing their above-ground biomass production during the imposed drought. These patterns were associated with decreased competitiveness of dominant species whose biomass decreased during drought. Significant increase in 13C values in plant tissue under drought indicated a better WUE for the measured species. Interestingly, the WUE was significantly higher in plots where subordinates were removed. Recovery and resilience were not affected by the summer drought, but the absence of subordinates reduced overall above-ground biomass in both watered and drought plots. Synthesis. We demonstrated that, independent of plant diversity, the presence of drought-resistant subordinate species increases plant community insurance against drought and, hence, is important for the functioning of grassland ecosystems.