What insurance should you require from your subcontractors?
Most GCs and property managers ask subcontractors for a certificate of insurance (COI) showing general liability and workers compensation coverage, plus commercial auto when the sub drives for the job and umbrella coverage on bigger projects. Many also ask for a few specific endorsements — additional insured, primary and noncontributory, and a waiver of subrogation. None of this is a legal formula, though. What you should require depends on your state, your trade, and — most of all — what your own client contract demands of you. When in doubt, confirm with your insurance agent or your client's contract.
This article walks through why hiring parties ask for sub insurance in the first place, what each commonly requested document actually does, and how to turn all of it into a simple checklist you can hand every sub before work starts.
Why hire only insured subs? Because risk rolls uphill
Here's the core idea in one sentence: when something goes wrong on a job, the claim tends to climb the ladder until it finds someone who can pay.
Say a sub's worker gets hurt, or a sub's mistake damages the property. If that sub carries no insurance — or too little — the injured person or the property owner doesn't just shrug. They look at whoever hired the sub. That's often you, the GC or property manager. Your insurance may end up responding to a problem you didn't cause, and your premiums can feel it for years.
Requiring subs to carry their own insurance is called risk transfer: each party carries the risk for their own work. It's not about distrust. It's about making sure a sub's accident stays the sub's claim, handled by the sub's insurer — instead of becoming yours.
The documents subs are typically asked for
The standard ask is a certificate of insurance — a one-page summary, usually on an ACORD 25 form, that shows what coverage the sub carries, in what amounts, and through what dates. The COI itself is proof of coverage at a moment in time, not the policy. Here's what hiring parties usually want to see on it:
- General liability (GL): covers injury to other people and damage to other people's property caused by the sub's operations. This is the baseline ask on nearly every job.
- Workers compensation: covers the sub's own employees if they're hurt on the job. Rules on who must carry it — and whether sole proprietors can be exempt — vary by state, so confirm with your state's rules or your agent before waiving it.
- Commercial auto: often requested when the sub drives vehicles for the work — hauling materials, towing equipment, running between sites. Personal auto policies often exclude business use, which is why the commercial version matters.
- Umbrella or excess liability: an extra layer of coverage that sits on top of the policies below it. Many GCs ask for it on larger jobs where the underlying limits alone wouldn't feel like enough.
The endorsements GCs as a rule ask for
An endorsement is an add-on that changes what a policy covers or how it behaves. Three come up constantly in sub agreements, and each does one specific thing:
One caution: a COI can list these in its description box, but the endorsement itself lives in the policy. If a requirement really matters to you, many hiring parties ask for a copy of the endorsement page, not just the certificate. We break each of these down further in our guide to COI endorsements.
- Additional insured: extends the sub's liability policy to also cover you, the hiring party, for claims arising out of the sub's work. If the sub's roofing job leads to a lawsuit that names you, the sub's policy can respond on your behalf.
- Primary and noncontributory: says the sub's policy pays first, and won't ask your policy to chip in. Without it, two insurers can end up arguing over who pays — with you stuck in the middle.
- Waiver of subrogation: after the sub's insurer pays a claim, it agrees not to turn around and sue you to recover the money. It closes a back door that can otherwise pull you into a claim you thought was settled.
How to actually set your requirements
There's no universal list of correct amounts, and anyone who gives you one without seeing your contracts is guessing. Minimums vary by state, by trade, and by contract — confirm specifics with your licensing body, your client's contract, or your insurance agent. That said, small operators tend to land on the same practical method:
Mirror your own obligations downward. Open the contract your client gave you. Whatever it requires of you — coverage types, limits, endorsements — is typically what you pass down to your subs, so there's no gap where you're promising more than the people doing the work actually carry.
Then make it real in two steps. First, write the requirements into your subcontractor agreement so they're a term of the deal, not a favor. Second, collect the COI before the sub sets foot on site. A certificate that shows up three weeks into the job protects nobody for those three weeks — and chasing paperwork mid-project is much harder than making it a condition of starting.
Keeping certificates current (the part everyone underestimates)
Collecting a COI once is the easy half. Policies typically run for a year, and subs' renewal dates rarely line up with your project calendar. A sub who was properly insured in March can be quietly uninsured by August, and nothing on your shelf of PDFs will tell you.
So whatever system you use — a spreadsheet, calendar reminders, dedicated software — the job is the same: know every sub's expiration date, and ask for the renewed certificate before the old one lapses, not after. This is the specific headache CompliCloud's Business plan was built around: it tracks your subs' COIs and gives each sub a no-login link to upload their renewed certificate themselves.
However you handle it, treat an expired certificate the same way you'd treat a missing one. The point of all this paperwork is simple: when something goes wrong, the right insurer answers the phone.
Common questions
Do 1099 subcontractors need to carry their own insurance?
Commonly, yes — that's a big part of why hiring parties treat them as independent businesses rather than employees. Many GCs won't let a sub on site without a COI showing at least general liability. Whether a specific coverage like workers comp is required for a sole proprietor varies by state, so confirm with your state's licensing body or your insurance agent.
What insurance limits should I require from a subcontractor?
There's no single correct number — limits vary by state, trade, and contract. The most common approach is to mirror whatever your own client contract requires of you, so your subs carry at least what you've promised upstream. Your insurance agent can sanity-check the amounts for your trade and region.
Is a COI enough, or do I need to see the actual policy?
A COI is a snapshot summary, not the policy, and it's issued for information only. For routine jobs, many hiring parties accept the certificate alone. When an endorsement like additional insured really matters, it's common to also request a copy of the endorsement page, since that's where the coverage actually lives.
What happens if I hire an uninsured subcontractor?
If that sub causes an injury or property damage, the claim usually climbs to you as the hiring party, and your own policy may have to respond. In some states, hiring a sub without workers comp can also affect your own premium at audit. The details vary by state and policy, so this is worth a direct conversation with your agent.
When should I collect a sub's COI — before or after work starts?
Before, as a condition of starting. Coverage matters most on day one, when the sub is newest to the site, and a certificate collected mid-project leaves a gap you can't fix retroactively. Many GCs write this into the subcontractor agreement so nobody has to argue about it later.
This guide is general information for US trades businesses, not legal or insurance advice. Requirements vary by state, locality and contract — confirm the specifics with your licensing body, your client’s contract, or your insurance agent.