Subcontractor Insurance Requirements: A Checklist for General Contractors
Your subcontract should spell out exactly what insurance each sub must carry, and you should check it before they start and before every payment. Use this checklist as a starting point, then confirm the details with your own insurance agent.
The core coverages
- Commercial general liability (CGL). Covers injury and property damage caused by the sub's work. Limits of $1,000,000 per occurrence and $2,000,000 aggregate are a common minimum; larger jobs often require more.
- Workers' compensation and employer's liability. Required by law in most states for subs with employees. If a sub claims to have no employees, get your state's exemption form.
- Commercial auto liability. For any vehicle the sub uses for the work.
- Umbrella or excess liability. Adds limits on top of the policies above. Common for roofing, structural and other higher-risk trades.
Contract terms to ask for
- Additional insured status for you (and often the owner) on the sub's general liability, including completed operations. Ask for the endorsement, not just a box ticked on the certificate.
- Primary and non-contributory wording, so the sub's policy pays before yours.
- Waiver of subrogation, so the sub's insurer cannot come after you to recover what it paid.
- Notice of cancellation requirements, so you hear if coverage stops.
Set requirements by trade
Not every sub carries the same risk. A painter and a roofer should not have the same limits. Many builders keep two or three requirement levels and assign each trade to one. Higher-risk trades such as roofing, excavation, steel and electrical usually sit in the top tier.
Before the first day and before every payment
- Collect the certificate of insurance and any endorsements before the sub starts.
- Check the limits, dates and additional insured wording against your subcontract.
- Record every expiration date.
- Before releasing a payment, confirm every required policy is still current. If not, hold payment until a renewed certificate arrives.
This checklist is general information, not insurance or legal advice. Your insurance agent should set the requirements for your business.