What Insurance Should a Subcontractor Carry? A GC's Guide

When you hire a subcontractor, you are also inheriting a share of their risk. If a sub's uninsured worker is injured on your site, or their crew damages a completed structure, the claim doesn't politely stop at their door—it can climb the contract chain straight to the general contractor. That is why verifying subcontractor insurance is one of the highest-leverage things a GC can do before anyone picks up a tool.

This guide walks through the coverage types most GCs require, the limits that are common in commercial construction, and why each one matters. It's written for the person who signs the subcontract, not the person who sells the policy.

This is general information, not legal or insurance advice. Your contracts, your state, and your project owners will drive the specific requirements you enforce.

The Five Coverages GCs Care About Most

Most subcontractor insurance programs are built from the same core pieces. Not every trade needs every coverage, but these five come up on nearly every project.

1. Commercial General Liability (CGL)

General liability is the foundation. It responds to third-party bodily injury and property damage arising from the sub's work—someone trips over their materials, a torch starts a fire, finished work fails and damages the surrounding structure.

Common limits GCs require:

• $1,000,000 per occurrence
• $2,000,000 general aggregate
• $2,000,000 products/completed operations aggregate

Two contract terms matter as much as the limits. First, additional insured status—both ongoing operations and completed operations—so your firm is covered under the sub's policy for claims arising from their work. Second, primary and non-contributory wording, so the sub's policy pays first before yours is touched. A certificate that shows healthy limits but omits these endorsements can leave you far more exposed than the numbers suggest.

2. Workers' Compensation and Employer's Liability

Workers' comp covers a sub's employees who are injured on the job. This is the coverage that protects you from a common and expensive scenario: an injured worker for an uninsured sub who then looks up the chain for someone to pay medical bills and lost wages. In many states, a GC can be held responsible for workers' comp for a subcontractor's employees if that sub failed to carry it.

Workers' comp is typically statutory (set by the state), paired with employer's liability limits often required around $1,000,000 each accident / disease. Watch for two things:

• Ghost policies and exclusions. A sole proprietor or LLC owner may exclude themselves from coverage. That can be legitimate, but you should know it and decide whether it's acceptable for the work.
• A waiver of subrogation in your favor, which prevents the sub's insurer from turning around and coming after you.

3. Commercial (Business) Auto Liability

If a sub drives to your site, hauls materials, or operates vehicles on the job—which is nearly all of them—auto liability covers bodily injury and property damage from those vehicles. A common required limit is $1,000,000 combined single limit, covering owned, hired, and non-owned autos.

Don't wave this off for small trades. A subcontractor whose personal truck causes a serious accident on the way to your site can generate a claim that a personal auto policy won't fully answer, especially when the vehicle is used for business.

4. Umbrella / Excess Liability

An umbrella policy sits on top of general liability, auto, and employer's liability, adding limits once the underlying coverage is exhausted. On larger commercial projects, GCs frequently require additional umbrella limits—often $1,000,000 to $5,000,000 or more, scaled to the size and risk of the job.

For a small residential remodel, you may not require an umbrella at all. For a mid-rise or a project with a demanding owner, umbrella limits are often written directly into the prime contract and flowed down to every sub.

5. Professional Liability (When Design Is Involved)

Standard general liability excludes claims arising from professional services—design, engineering, consulting. If a subcontractor performs any design-build work, delegated design, or provides engineering (think fire protection layout, structural connections, MEP design assist), they should carry professional liability, sometimes called errors and omissions (E&O). Typical required limits run around $1,000,000 to $2,000,000.

Most trade subs installing to someone else's drawings don't need this. The moment a sub is designing part of what they build, it belongs on the requirements list.

Matching Coverage to the Trade

Requiring identical insurance from every sub regardless of scope isn't rigor—it's a way to price out good small subs and create paperwork you won't enforce. Calibrate instead:

• Low-risk trades (painting, final cleaning, flooring): GL, workers' comp, and auto usually cover it.
• Higher-hazard trades (roofing, steel, excavation, electrical, demolition): expect higher limits, umbrella requirements, and closer attention to completed-operations coverage.
• Design-build or delegated-design subs (fire sprinkler, pre-engineered metal, some MEP): add professional liability.
• Environmental exposure (abatement, spray foam, anything touching hazardous materials): consider requiring contractors pollution liability, which standard GL often excludes.

For a deeper breakdown of how to set these thresholds by scope and risk, see our guide to subcontractor insurance requirements.

A Practical Checklist Before You Let a Sub Start

Use this every time a new sub comes onto a project:

1. Collect a current COI (ACORD form) listing all required coverages and limits.
2. Confirm limits meet your contract, including any owner-flowed-down requirements.
3. Verify additional insured status—ongoing and completed operations—for your firm.
4. Check for primary and non-contributory and waiver of subrogation language.
5. Read the policy dates. A certificate is a snapshot; coverage can lapse the week after it's issued.
6. Watch for exclusions that gut the coverage you're relying on (e.g., roofing, height, or specific-operation exclusions).
7. Confirm the certificate holder is named correctly—your legal entity, not a misspelling or a related company.
8. Set a renewal reminder tied to the earliest expiration date so you re-verify before it lapses.
9. Keep the certificate on file and matched to the correct project and subcontract.

The last step is where most GCs quietly lose control. Collecting a COI once is easy; keeping every sub's coverage current across multiple projects, with different expiration dates, is the part that fails on a spreadsheet.

Why Verification—Not Just Collection—Is the Real Job

A certificate of insurance proves coverage existed on the day it was issued. It does not guarantee the policy is still active, that the right endorsements are attached, or that the limits weren't eroded by earlier claims. The GCs who stay protected treat COIs as living records: tracked, dated, and re-verified at every renewal.

Doing that by hand across dozens of subs is tedious and easy to let slip—which is exactly the kind of gap that turns into an uninsured claim. Software built for this, like dedicated COI tracking software, automates the collection, flags missing endorsements, and reminds you before a policy expires rather than after.

If you'd like to see how much of that verification you can put on autopilot, TradeGuard offers a free 14-day trial. It's a low-pressure way to find out whether your current sub coverage is really as buttoned-up as your file folder suggests.