What a general contractor should require on a subcontractor's certificate of insurance
Requirements come first, certificates second
A certificate of insurance can only be checked against something. If your subcontract says "the subcontractor shall carry adequate insurance", there is nothing to check, and nothing to enforce after a claim.
The requirements belong in the subcontract, usually in an insurance exhibit. This guide covers what that exhibit typically contains and why each item is there. The right limits for your work depend on the project, the owner's requirements passed down to you, and your own insurers. Your broker should set them with you.
The coverages
| Coverage | Why you require it | Limits often seen in subcontracts |
|---|---|---|
| Commercial general liability | Injuries and property damage caused by the subcontractor's work, during the job and after it | $1,000,000 each occurrence, $2,000,000 aggregate, $2,000,000 products and completed operations |
| Business auto liability | Accidents involving the subcontractor's vehicles, including hired and non-owned | $1,000,000 combined single limit |
| Workers' compensation and employer's liability | Injuries to the subcontractor's own employees | Workers' comp at statutory limits; employer's liability $1,000,000 each accident, each employee, and policy limit |
| Umbrella or excess liability | Higher limits above general liability, auto and employer's liability | Varies widely with the trade and project size |
These figures are examples from published subcontract exhibits, such as this sample from a national general contractor, not a recommendation. Higher-risk trades (roofing, demolition, crane work, excavation) and larger projects usually carry higher umbrella limits. Some trades also need professional liability (design-build), pollution liability (abatement, mechanical) or inland marine for equipment.
Monopolistic states. In North Dakota, Ohio, Washington and Wyoming, workers' compensation comes from a state fund that doesn't include employer's liability. Subcontracts often require "stop gap" employer's liability coverage there.
The wording that does the real work
Additional insured, ongoing and completed operations
Require that you, the owner and anyone else your prime contract names are added as additional insureds on the general liability policy, and usually on auto and umbrella too. Ask for both ongoing operations and completed operations, and say for how long completed operations coverage must continue after the job ends. Our guide to additional insured status on a certificate explains the endorsements involved.
Per-project aggregate
Without it, one general liability aggregate is shared by every job the subcontractor works on that year. A per-project aggregate endorsement gives your project its own.
Primary and non-contributory
This decides whose policy pays first. Requiring the subcontractor's policy to be primary and non-contributory keeps claims caused by its work off your own policy, and off your loss history.
Waiver of subrogation
A waiver stops the subcontractor's insurer from paying a claim and then suing you to recover it. It is usually required on general liability, auto, workers' compensation and umbrella.
Notice of cancellation
The standard ACORD 25 no longer promises the certificate holder notice if a policy is cancelled. Its wording now says notice "will be delivered in accordance with the policy provisions" (Risk Management magazine). If notice matters to you, require the subcontractor to give it, or require an endorsement that obligates the insurer to notify you.
Acceptable insurers
Many subcontracts require insurers licensed in the project's state and rated at least A- by A.M. Best. Set the standard your own insurers and owner expect.
Flow-down
Require your subcontractors to impose the same requirements on their own sub-subcontractors. Otherwise the lowest tier on the job, often the least insured, is outside your program.
Timing
Require certificates, and the key endorsements, before the subcontractor mobilizes. Require updated certificates at every renewal. A subcontractor whose policy lapses mid-project and keeps working is one of the most common gaps on a job site.
One more reason this matters: in most states, if a subcontractor has no workers' compensation, the general contractor can become responsible for benefits to its injured employees (Insurance Journal).
Where Certgio fits
Certgio turns your subcontract's insurance exhibit into a list of requirements you can review and save, then compares every certificate your subcontractors send with that list. It flags missing coverages, short limits, a missing additional insured and expiry dates, and helps you send the subcontractor's broker the exact items to fix. It reminds you before policies expire.
It reads certificates, and a certificate can't prove an endorsement exists. When your requirements call for an endorsement, Certgio tells you to ask for the endorsement page.
Check a certificate against your requirements, free, no account needed
This guide is general information about subcontractor insurance requirements in the United States. It is not legal or insurance advice, and the limits shown are examples, not recommendations. Set your requirements with your broker and your attorney.