Subcontractor insurance requirements almost always center on four policies: commercial general liability, workers’ compensation with employer’s liability, commercial auto, and an umbrella or excess liability layer sitting on top. Standard minimums are $1,000,000 per occurrence and $2,000,000 aggregate on CGL, $1,000,000 combined single limit on auto, state-mandated workers’ comp with employer’s liability limits of $500,000 or $1,000,000, and umbrella coverage from $1M to $10M depending on your trade. On top of the policies themselves, general contractors demand specific endorsements and a correctly completed ACORD 25 certificate before you set foot on site.
Commercial General Liability
CGL is the foundation. Most contracts reference the ISO CG 00 01 policy form, the industry-standard template, and it responds when a third party suffers bodily injury or property damage because of your operations. A pedestrian trips over your equipment. You crack a water main. Your scaffold damages an adjacent storefront. The policy pays.
The common floor is $1,000,000 per occurrence and $2,000,000 general aggregate. Per-occurrence caps what the insurer pays for any one incident; aggregate caps total payouts across the policy period. High-value projects sometimes require more, but $1M/$2M appears in the vast majority of subcontractor agreements, and anything less is a nonstarter.
Premiums vary by trade. Small-to-mid-sized contractors typically pay between $750 and $2,500 per year for a standard $1M/$2M CGL policy. Painters and flooring installers often come in under $1,000. Roofers and general contractors can pay $3,000 to $6,000 or more.
Workers’ Compensation and Employer’s Liability
Workers’ comp is a statutory requirement in every state for businesses with employees, so if you have payroll, you carry it.1U.S. Department of Labor. Workers’ Compensation The policy covers medical costs and lost wages when someone on your crew is hurt on the job. If one of your workers is injured on a GC’s site and you don’t have coverage, the GC can end up liable under state labor laws. That exposure is exactly why every GC checks for workers’ comp before granting site access.
Every workers’ comp policy includes an employer’s liability component for lawsuits from injured employees that fall outside the standard workers’ comp system, such as negligence claims against the employer. NCCI base limits are $100,000 per accident and $500,000 as a disease policy limit, but construction contracts usually require higher. Expect $500,000 across all three categories (per accident, per employee for disease, and disease policy limit), with larger projects pushing to $1,000,000.
Sole proprietors and independent contractors with no employees sit in a gray area. Many states don’t require business owners to carry workers’ comp on themselves, but general contractors often require it anyway. If your state offers a formal workers’ comp exemption certificate, the GC may accept that in place of a policy. Some states charge a small fee for the exemption and require your taxes to be current. If you run a one-person shop, sort this out before you bid.
Commercial Auto Insurance
Any vehicle used for business — hauling materials, transporting crews, moving equipment between sites — needs commercial auto coverage. Contracts typically require a combined single limit of $1,000,000 per accident, which bundles bodily injury and property damage under one cap. The requirement covers vehicles you own, lease, or hire.
Personal auto policies almost universally exclude business use, so your personal coverage will not save you here. One serious collision on the way to a job site generates claims that blow past personal limits in a hurry.
Umbrella and Excess Liability
Your CGL, auto, and employer’s liability policies each have fixed caps. An umbrella or excess liability policy sits on top of all three and kicks in when a claim exceeds the underlying limit. On commercial projects, GCs routinely require this layer, and the required limits scale with the risk of your trade:
- High-risk trades such as structural steel, crane operators, and demolition: $5M to $10M minimum, sometimes higher near occupied buildings or critical facilities.
- Moderate-risk trades such as roofing, electrical, HVAC, excavation, and concrete: $2M to $5M.
- Lower-risk trades such as landscaping, low-voltage cabling, flooring, and painting: $1M to $2M.
The umbrella must typically “follow form” over your underlying CGL, auto, and employer’s liability coverage, meaning it mirrors their terms rather than introducing separate exclusions. If an umbrella requirement catches you off guard mid-bid, this is often the most expensive line item to add, and it’s also the most common deal-breaker when subs can’t get compliant.
Professional Liability for Design-Build Work
If your scope includes any design work — structural engineering, MEP design, architectural services, or other professional services under a design-build arrangement — you’ll face an additional requirement. Professional liability insurance, also called errors and omissions coverage, protects against claims arising from design defects, miscalculations, or flawed specifications.
This is a different animal from CGL. General liability covers physical injury and property damage from your operations. Professional liability covers the financial fallout from mistakes in professional judgment: an undersized HVAC system that needs replacement, a structural calculation that requires costly redesign. Required limits for subs with design responsibilities typically run $1,000,000 to $2,000,000 per claim. If your work is strictly install-to-plans with no design element, this requirement generally won’t appear.
Required Policy Endorsements
Carrying the right policies at the right limits is half the job. Most construction contracts also require specific endorsements that modify how your standard policies operate. Miss one and the certificate gets rejected during compliance review.
Additional Insured
The additional insured endorsement extends your CGL coverage to the general contractor, and sometimes the project owner, as a covered party under your policy. Two ISO forms work together. The CG 20 10 covers ongoing operations, adding the GC as an insured for liability “caused, in whole or in part, by your acts or omissions” while your work is in progress.2Independent Insurance Agents of Texas. ISO Form CG 20 10 – Additional Insured, Owners, Lessees or Contractors, Scheduled Person or Organization The CG 20 37 picks up where that stops, extending the same protection to claims from your completed work after you’ve left the site.3Independent Insurance Agents of Texas. ISO Form CG 20 37 – Additional Insured, Owners, Lessees or Contractors, Completed Operations Completed operations claims can surface years after a project wraps, so expect to see both forms required.
Primary and Non-Contributory
When both your policy and the GC’s policy could cover the same claim, primary and non-contributory language determines who pays. It forces your insurance to respond first and prevents your insurer from demanding that the GC’s insurer split the cost. Without it, carriers argue over allocation, settlements stall, and the GC’s loss history takes a hit it shouldn’t.
Waiver of Subrogation
After your insurer pays a claim, it normally has the right to pursue whoever caused the loss to recover what it paid. A waiver of subrogation surrenders that right against the GC. Without it, your carrier could sue the GC after paying out on a project-related claim, dragging them into litigation that was supposed to be resolved. GCs require the waiver because they want closed claims to stay closed.
The Certificate of Insurance
Once policies and endorsements are in place, you document everything on a certificate of insurance. The construction industry uses the ACORD 25 form as the standard proof-of-coverage document.4ACORD. Certificates of Insurance Frequently Asked Questions Submitting anything else slows the process or gets your documentation rejected outright.
The form lists each line of coverage — CGL, auto, workers’ comp, umbrella — with the insurer name, policy number, effective date, and expiration date. Specific limits appear in designated fields: per-occurrence and aggregate for CGL, combined single limit for auto, per-accident and disease limits for employer’s liability, occurrence and aggregate for umbrella.
The certificate holder section must show the GC’s or owner’s legal name and address exactly as written in your contract. A missing “LLC,” an abbreviated street name, or a wrong suite number can trigger rejection. It sounds minor. It’s one of the most common reasons certificates bounce.
The “Description of Operations/Locations/Vehicles” box is where your broker confirms the contract-specific endorsements are active. It should reference the project name or number and note that the policy includes additional insured status, primary and non-contributory coverage, and waiver of subrogation for the named certificate holder. A certificate with the right limits but no endorsement language in this field will often fail review.
The Cancellation Notice Gap
The ACORD 25 includes boilerplate stating that if a listed policy is cancelled before expiration, “notice will be delivered in accordance with the policy provisions.” Many GCs read this as a guarantee of notification. It isn’t. The language simply defers to whatever the policy itself says, and unless your policy carries a specific endorsement requiring notice to the certificate holder, the insurer has no obligation to tell the GC anything.
If your contract requires advance cancellation notice to the GC, your broker needs to request a cancellation notice endorsement from your insurer.5Independent Insurance Agents of Texas. ISO Form CG 00 24 – Earlier Notice of Cancellation Provided by Us This modifies the standard policy to extend the notice period or direct notice to specific parties. Without it, the GC won’t know your coverage lapsed until you fail to produce a renewal certificate, by which point you’re already non-compliant.
Closing a Gap Before It Costs You the Contract
Not every subcontractor walks in with insurance that already matches the spec. If your current limits or endorsements fall short, there are realistic options before you walk away.
Start with your broker. Adding endorsements to an existing policy is routine: additional insured, waiver of subrogation, and primary and non-contributory are standard requests that most commercial insurers process without hesitation. If the contract demands higher limits than your base policies provide, an umbrella is usually the most cost-effective fix, because you’re layering coverage on top of your existing CGL, auto, and employer’s liability rather than restructuring all three.
Negotiation is also on the table on privately funded projects. GCs weigh the risk of accepting lower limits against the cost of losing a qualified sub, and they may waive specific requirements when the scope and value of the work don’t justify the insurance cost. Carrying $10M in umbrella coverage for a $50,000 job makes no sense for anyone, and experienced GCs know it. Government contracts and large institutional projects, on the other hand, tend to treat their insurance specifications as non-negotiable.
Whichever route you take, start early. Waiting until the contract is signed and the start date is a week out leaves no room for policy modifications, endorsement processing, or certificate revisions. Two to four weeks of lead time keeps the compliance timeline from becoming an emergency. For projects that span more than one policy period, you’re also responsible for submitting a renewal certificate before the current one lapses. Set calendar reminders at 30 and 60 days out; a single-day lapse typically triggers suspension from the site and a freeze on outstanding invoices.
What Happens If You Skip It
The consequences of operating without proper coverage reach beyond losing one contract. If your insurance lapses or proves insufficient and someone is injured, the GC’s policy becomes the fallback, and the GC will pursue you for every dollar their insurer pays. Some CGL policies exclude subcontracted work entirely when the sub doesn’t carry their own coverage, leaving the GC unexpectedly exposed and the relationship permanently damaged.
For workers’ comp, the math is more direct. A GC who hires a sub without coverage can be held liable for that sub’s employees’ injuries. That liability is the reason compliance review exists and the reason GCs enforce it aggressively.