General Contractor Insurance Requirements: What You Must Carry — and What to Require from Every Sub

General contractor insurance requirements cover two distinct obligations — the coverage a GC must carry to satisfy their prime contract and bonding requirements, and the minimum coverage they must contractually require from each subcontractor.

What Insurance Does a General Contractor Need to Carry?

Your prime contract with the project owner will specify what coverage you must carry. Before you bid, read that section carefully — the minimums there define your floor. What follows are the commercial standards that most owners, lenders, and bonding companies expect to see.

Commercial General Liability (CGL)

CGL covers bodily injury and property damage claims arising from your operations, completed work, and products. Most commercial owners require GCs to carry at least $1M per occurrence and $2M aggregate. Larger projects — anything above $5M in contract value — commonly require $2M per occurrence. The aggregate limit resets each policy year, so confirm the policy period aligns with your project timeline.

Verify that completed operations coverage is included and extends beyond project completion — claims from finished work can surface years later. On some policies this coverage ends at project close-out.

Workers' Compensation

If you have employees, WC is required in every state. There are no exceptions based on company size once you pass the threshold — and in most states that threshold is low (often one employee). WC covers your workers' medical expenses and lost wages. Your policy will also include Employer's Liability, which covers lawsuits from injured employees that go beyond what WC pays — the standard minimum is $100K per accident / $500K policy limit / $100K per disease.

Commercial Auto Liability

Covers bodily injury and property damage from vehicles used in your operations. The standard minimum is $1M combined single limit (CSL). If your crews drive company-owned vehicles to job sites, this is non-negotiable. If workers use personal vehicles for company purposes, confirm whether your policy includes hired and non-owned auto coverage — most standard commercial auto policies do, but verify.

Umbrella / Excess Liability

Umbrella coverage sits above your CGL, auto, and employer's liability limits and responds when an underlying policy is exhausted. Most commercial contracts require a minimum of $1M umbrella. For projects above $5M in contract value, expect $5M or higher. Umbrella coverage is relatively inexpensive per million — carry more than the contract minimum if your business justifies it.

Builders Risk

Builders risk — also called course of construction insurance — covers the structure and materials while the project is under construction. On many projects the owner carries builders risk and names the GC as an additional insured. On others the GC is responsible for placing it. Confirm which party carries it in writing before mobilization — not during a claim. A gap leaves the entire project exposed to fire, weather, and vandalism losses with no coverage to respond.

Professional Liability / E&O

Standard for design-build GCs, general contractors who provide any design input, or those managing complex project programs. If a claim alleges that a design error caused the loss — not a construction accident — your CGL policy will not respond. Professional liability (errors and omissions) fills that gap. If your prime contract includes any design or coordination responsibility — even producing shop drawings or managing schedules — review it with your insurance broker before signing. A standard CGL policy will not respond to a design defect claim.

What Insurance Should GCs Require from Subcontractors?

Your subcontract should define the insurance requirements clearly and in writing. The table below reflects commercial standards for most projects. State-specific minimums — particularly for workers' compensation — differ; see the state guides linked at the bottom of this page.

Workers' compensation for subs with no employees

A sole proprietor with no employees may not be required by their state to carry WC. Some states allow officers or members of small LLCs to file exemptions. The problem: exemptions expire, get revoked, or stop applying the moment the sub hires a worker. You signed off on a COI with no WC because the sub claimed an exemption. Three weeks later he has a helper on-site — you never knew he hired anyone. That helper is injured on your job. The exemption doesn't cover a worker hired after it was filed, and your insurer gets that call. Require subs to carry WC regardless of exemption status, or at minimum verify any claimed exemption directly with the state at the time of onboarding and before each project.

For a deeper look at building a repeatable process around this, see how to track subcontractor insurance and how to track subcontractor compliance.

Additional Insured and Waiver of Subrogation

These two endorsements are not optional. If your subcontracts don't require both, fix your template before you put another sub to work.

Additional insured endorsement

Require that your company — and the project owner, if specified in your prime contract — be listed as additional insured on the sub's CGL and auto policies. This means you can make a claim directly against the sub's policy if their work causes a loss, without filing against your own coverage first.

Always require additional insured status on a primary and non-contributory basis. "Primary" means the sub's policy responds first. "Non-contributory" means the sub's insurer cannot demand your own policy share in the claim. Without both, the two insurers can dispute who pays what — while you wait.

Waiver of subrogation

After a sub's insurer pays a claim, the insurer has the legal right to pursue whoever was at fault to recover its payment — a process called subrogation. Without a waiver, the sub's insurer can file a subrogation claim against you even if you're named as additional insured on the GL policy. They're two separate protections.

Require waivers of subrogation on the sub's CGL and Workers' Compensation policies in your favor. On WC policies specifically, this is sometimes called a waiver of subrogation endorsement or "WOS" — confirm it's present on the certificate for both lines.

Notice of cancellation

Most commercial COI forms reference a 30-day cancellation notice provision — but that is standard ACORD language and does not actually bind the sub or their insurer to notify you. Your subcontract must separately obligate the sub to notify you directly and promptly if their coverage changes or lapses mid-project. Require at least 30 days' notice in writing and make it a subcontract condition, not just a COI footnote.

How Minimums Scale by Project Size and Trade Type

For high-hazard trade packages — roofing, demolition, structural steel, excavation — the COI is not enough. Request the declarations page. Some policies exclude these operations outright or apply sublimits that won't appear on the certificate. The table below gives CGL and umbrella floors by project scenario; your prime contract limits define your floor.

State minimum differences

There is no federal statutory minimum for private construction subcontracts. State law governs WC requirements; everything else is set by your contract. For state-specific rules, see:

• Texas subcontractor insurance requirements — Texas is a non-subscriber WC state; the rules are unlike any other
• Florida subcontractor insurance requirements — Florida requires WC for all construction employers with one or more employees
• California subcontractor insurance requirements — California has strict contractor licensing and insurance enforcement via CSLB

How to Collect, Verify, and Track Subcontractor COIs

Collecting a COI once at onboarding is the minimum. It is not a compliance program. A COI collected in January is stale by December. A sub's policy can be cancelled mid-project with no automatic notification to you.

Before a sub starts work

• Collect a current COI. Verify that all policy expiration dates are in the future and that the policy periods cover the expected duration of the subcontract.
• Confirm your company is named as additional insured and that the certificate includes the waiver of subrogation. If either is missing, return the certificate and request a corrected one from the issuing agent — not the sub.
• For subs claiming WC exemptions, verify the exemption is active directly with the state. Do not accept the sub's word. Exemptions expire and can be revoked.
• Verify the sub's contractor license separately. A COI says nothing about license status. A sub can hold a clean COI and a suspended license simultaneously — and you carry the risk for work performed under a bad license.

During the project

• Track every expiration date. A COI collected at project kickoff will expire during a multi-year project. Set renewal reminders at 60 days and 30 days before expiration — not on the day it lapses.
• For subs whose policy renewal falls mid-project, require the new COI before the old one expires. There should be no gap in coverage on an active job site.
• If a sub's insurance is cancelled mid-project, stop work until replacement coverage is confirmed. A sub working without valid insurance after a cancellation is an uncovered exposure on your project.

Verification: what the COI does not tell you

A COI is a summary document issued by the sub's insurance agent. It is not a guarantee. The limits shown may have been reduced by prior claims. The policy may have been cancelled after the certificate was issued. Two things to do that the certificate cannot do for you:

• Call the issuing agent listed on the certificate to confirm coverage is active and the limits are accurate. Do this for new subs and any sub on a high-value package.
• Verify the contractor's license separately. Use our license verification tool to check status in Texas, Florida, and California. A clean COI and a suspended license can coexist — we catch that.

Use magic-link vendor self-service to have subs upload their own certificates without creating an account. Automated alerts notify you before any COI expires, and per-project compliance views show you which subs are covered for each active job site at a glance.

Frequently Asked Questions

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