Key Takeaways
- Most general contractors require subcontractors to carry general liability with specific limits and endorsements before they can set foot on a jobsite.
- Additional insured status for both ongoing and completed operations, primary and noncontributory wording, and a waiver of subrogation are the most common contract requirements.
- Exclusions such as residential, height, action-over, or classification limitations can quietly make a policy unacceptable to a general contractor.
- Reviewing subcontract insurance clauses before you bid, not after you win, is the simplest way to avoid delays and unexpected premium charges.
Subcontractors need a commercial general liability (CGL) policy that matches what general contractors write into their subcontracts: adequate per-occurrence and aggregate limits, additional insured status for ongoing and completed operations, primary and noncontributory wording, and a waiver of subrogation, says the team at Bozzuto Group, a San Diego–based specialty commercial insurance brokerage. Without them, many general contractors will not sign.
What does contractor general liability cover?
Commercial general liability is the policy that responds when your work causes bodily injury or property damage to someone else. For a subcontractor, that might be a visitor tripping over your materials, a dropped tool damaging a finished floor, or a leak from your plumbing work that ruins a tenant's inventory months after you leave.
A typical contractor CGL policy has three core parts:
- Premises and operations: injuries and damage that happen while you are working.
- Products-completed operations: claims that arise after your work is finished and handed over. In construction, this is often where the largest claims come from, because defects can surface years later.
- Personal and advertising injury: claims such as libel or certain privacy allegations, which are less common for trades but still included.
CGL does not pay to fix your own faulty workmanship, cover your tools, or protect injured employees. Those needs are handled by other policies, such as contractor's equipment coverage and workers' compensation.
What do general contractors require from subcontractors?
General contractors transfer risk down the chain. Their owners and lenders require it of them, so they require it of you. The insurance exhibit in a subcontract usually spells out the following:
- Minimum limits. A per-occurrence limit and a general aggregate limit, plus a separate products-completed operations aggregate. Larger projects often require an umbrella or excess policy on top.
- Per-project aggregate. This endorsement gives each job its own aggregate limit so a claim on one project does not use up the limits available for another.
- Additional insured status. The GC, and often the owner and others, must be added to your policy for ongoing operations and, increasingly, for completed operations.
- Primary and noncontributory. Your policy must respond first and not seek contribution from the GC's own insurance.
- Waiver of subrogation. Your insurer agrees not to pursue the GC to recover what it paid on a claim.
- Notice of cancellation. Advance notice to the GC if your policy is canceled.
Your proof of all this is a certificate of insurance backed by the actual endorsements. Many GCs now ask for copies of the endorsements themselves, not just the certificate.
Which exclusions can cost you a job?
A policy can have the right limits and still fail a GC's review because of what it excludes. Contractor policies, especially in the non-admitted market, often carry restrictive endorsements that keep premiums lower but limit where and how you can work.
| Exclusion or limitation | What it means | Why it matters to a GC |
|---|---|---|
| Residential or tract housing | No coverage for work on condos, apartments, or single-family homes | Disqualifies you from mixed-use and multifamily projects |
| Height restriction | No coverage for work above a set number of stories or feet | Rules you out of mid-rise and high-rise work |
| Action-over | Excludes claims where your injured worker sues the GC, who then pursues you | Leaves the GC exposed to a common claim scenario |
| Classification limitation | Covers only the trade listed on the policy | Any scope outside that trade may be uninsured |
| Prior or known work | Excludes work completed before the policy began | Creates gaps in completed operations coverage |
Read your policy's endorsement schedule before you bid. If an exclusion conflicts with a project, it is far easier to address at renewal than in the middle of a contract negotiation.
How much does subcontractor general liability cost?
Premiums vary widely, so it is more useful to understand what drives them than to rely on averages. Coverage depends on the carrier and policy wording, and pricing follows the same factors:
- Trade class. Roofing, excavation, and structural work rate higher than finish carpentry or painting.
- Payroll or revenue. Most contractor GL is rated on payroll or gross receipts and adjusted at year-end audit.
- Subcontracted costs. If you sub out work, insurers look at whether your own subs carry insurance and name you as additional insured. Uninsured subs are often charged as if they were your employees.
- Project mix. Residential, wildfire-exposed, or high-rise work affects both price and availability.
- Loss history. Your loss runs for the past several years heavily influence terms.
- Endorsements requested. Blanket additional insured, waiver, and per-project aggregate endorsements may carry modest additional premium.
How do you keep jobs once you have them?
Winning the first contract is only half the work. General contractors re-verify insurance at every renewal and sometimes every project, and a lapse can lead to withheld payments or removal from the approved vendor list.
- Keep a single folder with your current policy, every endorsement, and sample certificates.
- Calendar your renewal date at least 60 days out so new certificates are ready before the old ones expire.
- Collect certificates from your own subcontractors and confirm they name you as additional insured.
- Keep accurate payroll and subcontractor records to avoid surprise audit bills.
- Report incidents promptly, even when you think they are minor.
How Bozzuto Group Helps
We start with the contract, not the policy. Send us the insurance exhibit from a subcontract you are bidding, and we compare it line by line against your current coverage so you know about gaps before the GC does. We place contractor GL with carriers that offer blanket additional insured, per-project aggregate, and waiver endorsements, and we look for forms without the exclusions that commonly fail GC reviews. We also coordinate umbrella limits, issue certificates quickly through our client portal, and help you prepare for payroll audits. Learn more about our work with construction businesses.
Ready to review your coverage before your next bid? Call 858-805-1865 or request a quote online.
Frequently Asked Questions
Do subcontractors need their own general liability insurance?
In most cases, yes. General contractors usually require each subcontractor to carry its own commercial general liability policy with specified limits and endorsements. Relying on the general contractor's policy is risky because that policy is designed to protect the GC, and it may exclude or limit coverage for subcontractors' work. Your subcontract's insurance exhibit will state exactly what is required.
What general liability limits do general contractors usually require from subs?
Requirements vary by project size and owner. Many subcontracts ask for a per-occurrence limit and a general aggregate, a separate products-completed operations aggregate, and an umbrella or excess layer on larger jobs. Always read the specific insurance exhibit, because public, commercial, and residential projects often set very different minimums.
What is completed operations coverage for contractors?
Completed operations coverage responds to bodily injury or property damage that occurs after your work is finished and turned over, such as a leak from a plumbing installation discovered months later. It is part of a standard CGL policy, but general contractors often require you to name them as additional insured for completed operations and keep that coverage in place for several years after the project ends.
Why did a general contractor reject my certificate of insurance?
Common reasons include limits below the contract minimum, missing additional insured or waiver of subrogation endorsements, a residential or height exclusion that conflicts with the project, an expired policy, or the wrong named insured. Ask the GC for the specific deficiency, then have your broker confirm whether the policy can be endorsed or whether different coverage is needed.
Is general liability for contractors based on payroll or revenue?
Contractor general liability is usually rated on payroll, gross receipts, or subcontracted costs, depending on the carrier and trade. The premium you pay up front is an estimate, and the insurer audits your actual figures after the policy year ends. If your payroll or revenue grew, or you used uninsured subcontractors, you may owe additional premium at audit.