Subcontractor Insurance — What Your GC Is Actually Asking For

Written by Michael Benoit, Licensed P&C Broker · CA DOI #0H99349 · Reviewed September 2026

Subcontractor insurance is the package a general contractor requires before you are allowed to start: commercial general liability at $1,000,000 per occurrence and $2,000,000 aggregate as the near-universal floor, workers' compensation once you have employees, and commercial auto if a vehicle is used in the business. Tools and equipment, an umbrella, and — only where you carry design or consulting responsibility — professional liability fill in from there. Almost no state requires a subcontractor to carry general liability by statute. Your subcontract does, and that obligation gets enforced through a certificate of insurance and the endorsements sitting behind it. Which is where the two real problems live: endorsements the GC assumed were attached and never were, and certificates that were not on file for the dates the work was actually performed.

What Insurance a Subcontractor Actually Needs

Start from the requirement, not from the coverage list. Nearly every subcontractor buying insurance is buying it because a general contractor sent an insurance exhibit and will not issue a purchase order without a certificate. That exhibit is the specification.

Commercial general liability is the core. It responds to third-party bodily injury and property damage arising out of your operations — the tenant hurt by a covered condition from your work, the finished floor below the unit where your connection failed. It is the policy every subcontract names, and it is the one carrying the endorsements the GC cares about. $1,000,000 per occurrence and $2,000,000 general aggregate is the floor on almost all commercial work, usually with a separate $2,000,000 products-completed operations aggregate.

Workers' compensation covers injury to your own employees, and general liability specifically does not. Most states require it by statute once you meet that state's employee threshold, and construction trades are often subject to stricter requirements. California's rules for licensed contractors are covered in detail in our California contractor workers' comp guide. What subs underestimate is its second function: your workers' comp certificate is the document that keeps payments to you from being reclassified as payroll on the hiring contractor's audit. That mechanism is covered in detail further down this page, and it is the single most expensive misunderstanding in this trade.

One clarification before the rest: if you work alone on small residential jobs and rarely see a subcontract, the coverage picture is simpler and the licensing rules are different — start with handyman insurance in California instead. This page is written for subs working under general contractors.

Tools and equipment — inland marine, sometimes written as a contractors' equipment policy — insures your own property. General liability does not, which remains the most common misconception we correct. Coverage is typically subject to a deductible, a per-item limit, and scheduling requirements for higher-value pieces.

Commercial auto applies once a vehicle is used in the business. Business use has to be disclosed, and whether a personal auto policy responds to a work-related loss depends on the policy and the insurer, so it is worth asking rather than assuming. Many subcontracts require $1,000,000 combined single limit on hired and non-owned auto as well.

Professional liability is typically relevant where you assume professional, design, consulting, or delegated-design responsibility — design-build, delegated engineering, shop drawings you are contractually responsible for. General liability policies typically exclude professional services, so if your subcontract makes you responsible for a design element, that gap is real. If you build to someone else's drawings, you generally do not need it.

An umbrella sits above general liability and auto and is required more often than subs expect. Institutional owners, public agencies, and larger GCs routinely require $2,000,000 to $5,000,000 total. Larger contracts often require the umbrella or excess layer to extend additional insured protection and satisfy the required order of coverage — and this is where a common assumption bites. Do not treat "follows form" as shorthand for every underlying endorsement carrying upstairs. Excess policies can carry their own other-insurance conditions, and primary and non-contributory wording in particular may need separate wording or an endorsement at the excess layer. Verify the umbrella terms on their own.

What General Liability Typically Covers

Forms and exclusions vary by carrier, and your classification and disclosed operations control how the policy applies. With that said, a standard commercial general liability policy is generally built around these:

What It Does Not Cover

This is where trust gets earned or lost, and it is where a subcontractor discovers the gap at the worst possible moment. Broadly, a general liability policy is typically not designed to pay for:

• Your own tools and equipment. Liability coverage responds to someone else's property, not yours. Tools belong on an inland marine or contractors' equipment policy.
• Your own defective work. If your installation fails and only your installation has to be torn out and redone, that is generally your cost, not a liability claim. Resulting damage to other property is a different question, and the answer turns on the specific damage-to-your-work and faulty-workmanship exclusions in your form.
• Injury to your own employees. That belongs under workers' compensation, and the employer's liability section of the comp policy handles the tail.
• Professional and design liability. Advice, drawings, calculations, and specification decisions rather than physical work. Excluded on most general liability forms.
• Auto liability. Vehicle exposure belongs on commercial auto.
• Contractual liability you assumed beyond an "insured contract." A broad indemnity clause in a subcontract can obligate you well past what the policy's contractual liability coverage picks up. Any obligation exceeding available insurance becomes an uninsured exposure for your business, and potentially for other responsible parties depending on your entity and the circumstances.
• Operations you did not disclose, or that were misclassified. If you were written as a drywall sub and the claim arises from the framing you also do, expect a coverage question.
• Higher-hazard exposures such as work at height, excavation depth, structural steel, roofing, blasting, or hot work — frequently excluded or restricted depending on how the account was written.

Certificates, Additional Insured, and GC Flow-Down

More subcontractor coverage gets rejected here than anywhere else, and it is almost never because the sub had no insurance. It is because the certificate said something the policy could not back up.

A certificate is evidence, not coverage

The ACORD 25 certificate form says so on its face: it is issued as a matter of information only, confers no rights on the holder, and does not amend, extend, or alter the coverage afforded by the policies. That is not fine print anyone should ignore — it is the whole legal status of the document.

Which means a certificate with the GC's name typed into the additional insured box proves exactly nothing if no additional insured endorsement is attached to the underlying policy. A certificate can be issued describing coverage the policy does not provide. It happens routinely, usually not maliciously, and nobody discovers it until a claim is tendered and declined. The document that matters is the endorsement, and any GC's risk manager worth the title will ask for copies of the endorsements rather than the certificate alone.

CG 20 10 vs. CG 20 37 vs. CG 20 38 — and why the difference costs money

These are ISO endorsement forms, and the numbers are not interchangeable:

• CG 20 10 — Additional Insured, Owners, Lessees or Contractors, Scheduled Person or Organization. Names the additional insured specifically, and covers ongoing operations only. Current editions are 04 13 and 12 19.
• CG 20 37 — the same scheduled structure, but for completed operations: liability included in the products-completed operations hazard, meaning claims arising after your work is finished and put to use. Also 04 13 and 12 19.
• CG 20 33 — blanket, automatic status when required in a construction agreement with you. Picks up the party you actually contracted with. Ongoing operations only.
• CG 20 38 — blanket, automatic status for other parties when required in a written construction agreement. This is the one that reaches the owner, the lender, or the construction manager you have no direct contract with but whom the GC's subcontract obligates you to add. Ongoing operations only — and it carries its own qualifying language, so a contract requiring you to add an upstream party does not automatically mean that party qualifies. The form generally reaches persons or organizations you are performing operations for, which means a lender you do no work for may fall outside it even though the subcontract names it.
• CG 20 39 and CG 20 40 — introduced in the 12 19 edition, these are the completed-operations counterparts to CG 20 33 and CG 20 38. They are the blanket forms that close the completed-operations gap, and a large share of policies in force do not carry them.

Here is the sequence that generates the phone call. A GC's subcontract says "add us as additional insured." The sub's policy carries a blanket form — CG 20 33 or CG 20 38 — so a certificate is issued and everyone is satisfied. The job finishes. Two years later, a construction defect suit names the GC over work the sub performed. The GC tenders to the sub's carrier as an additional insured. The carrier looks at the blanket endorsement, sees it is limited to ongoing operations, and declines, because operations ended at closeout.

The GC's own carrier now handles the defense and looks for someone to recover from. That someone is the sub, through the indemnity clause in the subcontract — and indemnity obligations are personal, not insured, to the extent they exceed what the policy's contractual liability coverage picks up. This is the most expensive gap in subcontractor insurance and it is invisible on a certificate.

Primary and non-contributory

Two separate concepts that travel together. "Primary" means your policy pays first on a covered claim. "Non-contributory" means your insurer does not ask the GC's insurer to share. GCs demand both because without them, two carriers can spend months arguing about proportion while a claim sits.

It is not automatic. On ISO forms it comes from CG 20 01, Primary and Noncontributory — Other Insurance Condition, or from equivalent carrier wording, and it modifies the policy's other-insurance condition. A certificate that types the words into the description box without the endorsement behind it is the same empty gesture as the additional insured box.

Waiver of subrogation

Subrogation is your carrier's right to step into your shoes and recover from whoever caused the loss after it pays you. A waiver of subrogation is your carrier agreeing, in advance, not to pursue that recovery against a named party — usually the GC and the owner — even if they contributed to the loss.

The carrier is giving up a real asset, which is why it typically carries a premium charge, generally a small percentage on the general liability side and a filed charge on workers' compensation. The general liability form is CG 24 04. The workers' compensation form is WC 00 03 13, and in some states it must be filed with the rating bureau.

Subs are told "you already have that" more often than it is true. Some policies carry a blanket waiver where required by written contract. Many do not, and workers' compensation waivers are frequently not blanket at all. It is worth confirming against the endorsement schedule rather than a certificate.

Per-project aggregate

Your general aggregate is shared across everything you do in a policy year. If a bad loss on an unrelated job burns through it in March, the GC on your current project may find nothing left when their claim is filed in October, notwithstanding a certificate showing $2,000,000.

A per-project aggregate endorsement — CG 25 03 for designated construction projects, CG 25 04 for designated locations — gives each project its own aggregate. Sophisticated GCs and most public work require it. It costs money and it is worth asking for on any account running several jobs at once.

Reading the requirement

A typical insurance exhibit looks something like this. The operative phrases are highlighted:

What each phrase actually obligates you to buy

• Occurrence basis. Not claims-made. Coverage triggers on when the injury or damage happened, not when the claim is reported — which is why it can respond years after the job.
• Separate aggregate per project. CG 25 03 or CG 25 04. This is a distinct endorsement with a distinct charge, and it is frequently the line subs skip past.
• Additional insured for ongoing and completed operations. The critical phrase. A blanket ongoing-operations form alone does not satisfy it. You need CG 20 37, or a blanket completed-operations form such as CG 20 39 or CG 20 40.
• Forms at least as broad as. This wording lets a carrier's proprietary equivalent satisfy the requirement — but "at least as broad" is a judgment someone has to make, and many manuscript blanket forms are narrower than the ISO forms they replace. Some GCs reject blanket forms outright and require scheduled endorsements naming them.
• Primary and non-contributory. CG 20 01 or equivalent, and it is not implied by additional insured status.
• Waiver of subrogation under both policies. Two endorsements — CG 24 04 and WC 00 03 13 — from two different carriers, each usually with its own charge.
• Three years of completed operations after final completion. This obligates you to keep the policy in force after the job ends. Dropping coverage the month you finish puts you in breach of a contract you already signed.

What to hand your broker when a GC sends insurance requirements

• The subcontract insurance exhibit itself — the full section, not a summary of it
• The general contractor's exact legal entity name and mailing address, as written in the contract
• The owner's legal entity name, and any lender or construction manager the contract requires you to add
• Project name, project number, and site address
• Required limits, including any umbrella or excess requirement and any per-project aggregate language
• Whether additional insured status must include completed operations, and for how many years after completion
• Whether the GC will accept blanket forms or requires scheduled endorsements naming them specifically
• Whether waiver of subrogation is required on general liability, workers' compensation, or both
• Whether primary and non-contributory wording is required
• The certificate holder's exact name, address, and delivery email — and the deadline you were given

The compliance portal sitting between you and your GC

On most commercial and institutional work you no longer email a certificate to a person. You upload it to a third-party compliance platform that checks it against the contract requirements and either clears you or does not. The names you will run into are RealPage Vendor Credentialing (formerly Compliance Depot), EXIGIS RiskWorks, myCOI, and Oracle's Textura, alongside a growing set of newer entrants.

Two things about them matter to you. First, they check endorsements, not just the certificate — EXIGIS's compliance module is built to verify and track certificates and endorsement documents, which is exactly why "additional insured per written contract" typed into the description box gets flagged rather than accepted. Second, they are wired to payment. Textura's own documentation includes settings that automatically place holds on payments to any subcontractor out of compliance. That is the leverage, and it is how a paperwork gap becomes a cash-flow problem inside one draw cycle.

The rejections that come back most often, in rough order of frequency:

• Named insured does not match. The certificate shows your DBA and the subcontract names your corporation, or the reverse. It is a string comparison, and no judgment gets applied.
• Endorsement copies not attached. The certificate references additional insured status and no endorsement PDF was uploaded with it.
• Wrong form type. A blanket form where the requirement specified a scheduled endorsement, or an ongoing-operations form where the requirement said ongoing and completed.
• Policy period does not span the contract term. Flagged immediately, and re-flagged at every renewal for the life of the job.
• Certificate holder name or address wrong. It has to match the contract exactly, including the entity suffix.
• A required line missing entirely — most often the umbrella, or workers' compensation for a sub with no employees who assumed it did not apply to them.

These platforms also typically bill the vendor rather than the hiring contractor. RealPage's credentialing enrollment is charged to each vendor per property — one published property-management vendor packet lists $99 a year for on-site vendors and $80 for off-site — so a sub working across several managed portfolios accumulates a stack of small annual fees. Amounts vary by platform and by client, so confirm rather than assume.

The practical move is to ask for the compliance requirements before binding, and to ask your broker for the endorsement PDFs rather than the ACORD 25 alone. A certificate satisfies a person. A portal wants the endorsements.

A generalist agency handling a restaurant, two homeowners policies, and your subcontract in the same afternoon will send that exhibit to a service desk and get back to you when it gets back to you. A shop that writes contractors reads the exhibit, flags what your current policy cannot deliver, and works the endorsement request with the carrier directly. That is the difference worth shopping for — not the premium.

When You're the One Hiring Subs

The moment you sub out any part of your scope, every requirement on this page runs downhill through you — and the audit exposure stops being someone else's problem. Most subs meet this the year after they first hire another crew.

Requirements flow down, and they do not soften on the way

Your subcontract obligates you, not the person you hired. If the GC required $1M/$2M limits, additional insured status for ongoing and completed operations, primary and non-contributory wording, and a waiver of subrogation, you owe all of it on that project — including for work performed by someone else. Which means requiring the identical package from your own sub, at the same limits or better.

Vendor agreements say this out loud. RealPage's vendor credentialing terms, used across a large share of managed multifamily property, require the vendor to contractually require its own subcontractors to carry licensing and insurance of the same types and limits, including additional insured, waiver of subrogation, and primary and non-contributory. The pass-through is explicit, and it is enforced through the same certificate machinery described above.

There is a wrinkle specific to additional insured status. Your sub has no contract with the GC or the owner — their contract is with you. A scheduled endorsement naming only you does not put the GC and owner onto your sub's policy. That is exactly the gap the blanket forms were written to close. CG 20 38 for ongoing operations and CG 20 40 for completed operations both reach parties the sub is contractually required to add but has no direct contract with. When you hand a sub your insurance requirements, name every upstream party the GC named to you.

You are the one holding the audit now

Everything above about chargebacks applies to you from the other side of the table. Your workers' compensation and general liability audits will examine payments you made to subs, and any payment you cannot document with a certificate spanning the dates of the work is exposed to being added to your own payroll or receipts basis at your governing class code. Your premium, your loss history, your experience modification.

California adds a harder edge. Under Labor Code section 2750.5, holding a valid contractor's license is a condition of independent contractor status for any work requiring one — so hiring an unlicensed sub is not merely a documentation problem. It makes that person your employee for workers' compensation purposes, and if they are injured, that is your claim. Business and Professions Code section 7031 compounds it from the other direction: an unlicensed contractor generally cannot enforce the contract or sue to collect payment, and may be ordered to return everything already paid. Cold comfort when you are the one paying their medical bills.

What to collect before their first day

• General liability certificate with limits matching or exceeding what you owe upstream
• Copies of the actual additional insured endorsements — naming you and every upstream party the GC named to you
• Waiver of subrogation and primary/non-contributory endorsements, if you were required to provide them
• Workers' compensation certificate, or a minimum-premium policy certificate where they have no employees
• Commercial auto certificate if they drive to your jobsites
• CSLB license number, verified live on CSLB's lookup for both status and classification scope
• A written subcontract — in California the section 2781 exception fails at criterion one without it
• A calendar reminder for each policy expiration, tied to whether they are still on your job

None of this is optional record-keeping. It is the file you will be asked for at audit, and it decides whether each payment is treated as subcontract cost or as your own payroll.

California Subcontractors — The Requirements That Actually Bind

The core CGL, certificate, and additional insured concepts covered above are broadly similar across states, but policy forms, workers' compensation systems, licensing rules, and judicial interpretation all vary by jurisdiction. Here is the California picture in one place, with a note at the end on how other states diverge structurally.

Three of those catch California subcontractors repeatedly.

The LLC general liability requirement is an entity rule, not a trade rule. The same person doing the same work carries a statutory insurance obligation as an LLC licensee and none as a sole owner. Read the limit carefully, because it is widely misquoted: section 7071.19 requires a total aggregate limit of at least $1,000,000 for an LLC with five or fewer persons on the personnel of record, increasing by $100,000 for each additional person up to a $5,000,000 maximum. It is an aggregate figure, not a per-occurrence figure, and the statute permits either a claims-made or an occurrence policy. This obligation sits alongside — not instead of — the $25,000 contractor bond every active California license has to carry, and the $100,000 LLC employee/worker bond. Contractors restructure for tax or liability reasons and inherit all of it without anyone mentioning it at formation. Full detail is in our California contractor insurance guide.

Section 7031 costs more than any fine. An unlicensed person performing work that required a license generally cannot enforce the contract or sue to collect payment, and may be ordered to return everything already paid. For a sub who finishes a scope and then learns the classification was wrong, that single provision outweighs every other penalty combined — and working outside your classification is treated the same as working unlicensed. If you are not licensed yet, start with how to become a licensed contractor in California.

The 2028 workers' comp date is closer than it reads — and the penalty for guessing wrong arrived in 2026. SB 216 (Ch. 978, Stats. 2022) set a universal workers' compensation requirement for all CSLB licensees regardless of employee count. SB 1455 (Ch. 485, Stats. 2024) paused it to January 1, 2028 and directed CSLB to build a process for verifying that a licensee claiming no employees actually has none.

SB 291 (Ch. 455, Stats. 2025) then sharpened the enforcement side effective January 1, 2026. It requires that verification process to include an audit, proof, or other means of obtaining evidence, and it directed CSLB to report its proposed process to the Legislature. And it set minimum civil penalties for licensees found to have employed workers without maintaining coverage: $10,000 per violation for a sole owner and $20,000 for a partnership, corporation, LLC, or tribal business licensee, with higher amounts available for subsequent violations. It also bars CSLB from renewing or reinstating such a license until valid proof of coverage is on file.

CSLB submitted that report in March 2026. Its Workers' Compensation Exemption Report sets out a proposed exemption-verification process — eligibility criteria for a licensee claiming no employees, and targeted audits to test those claims. Read it as a proposal to the Legislature, not as a change in the law. The recommendations do not themselves move the January 1, 2028 universal requirement, and they do not create an exemption beyond what current law already provides. Watch for follow-on legislation or CSLB rulemaking, because that is what would actually change anything.

Neither SB 291 nor CSLB's report moved the 2028 date. What SB 291 changed is the cost of a wrong exemption in the meantime. If you hold a California license, have been filing an exemption certificate, and use any labor that a verification audit might characterize as employment, pricing a minimum-premium policy now is considerably cheaper than the alternative.

How other states differ — structurally

If you work outside California, most of what this page covers about coverage structure, endorsement forms, certificate timing, portals, and audit exposure still travels, because those follow carrier and ISO conventions rather than state statute. Forms are still filed and approved state by state, though, so verify rather than assume. What changes most falls into three patterns:

• The classification test. Some states apply an ABC test like California's, some retain a common-law right-of-control test, and some make the hiring contractor the statutory employer of any uninsured sub by default. Construction carve-outs exist in some ABC states and not in others, so the California answer does not travel.
• Whether general liability is required for licensure. Most states do not require it. A minority do, and at limits well below what any real subcontract will demand — meaning satisfying the state does not come close to satisfying the GC.
• Whether you can buy workers' compensation at all. Four states — Ohio, North Dakota, Washington, and Wyoming — operate monopolistic state funds, so coverage comes from the state rather than a private carrier and there is no private-carrier certificate to hand anyone. This surprises out-of-state general contractors constantly.

Verify your own state with its contractor licensing board and its workers' compensation authority, and verify any broker you deal with through your state's department of insurance. The insurance-department directory is linked in the resources section.

Subcontractor Insurance — FAQ

The questions subcontractors bring us most, answered the way we'd answer them on the phone.