What to Require in a Subcontractor's Insurance Program

The Core Requirements Most GCs Should Set

General Liability limits: a minimum per-occurrence and aggregate limit appropriate to the size and risk of the work — commonly $1,000,000 per occurrence / $2,000,000 aggregate as a baseline, higher for higher-risk trades or larger projects.

Additional insured status, on a primary and noncontributory basis, using the correct ISO endorsement form for the exposure (ongoing operations vs. completed operations).

Waiver of subrogation, both in the contract and as an actual endorsement on the policy.

Workers' compensation coverage, meeting your state's statutory requirements, to protect against a subcontractor's employee being injured on your jobsite and the claim landing on the GC.

Commercial auto liability, if the sub's work involves vehicles or equipment being driven to and from the site, sized to the exposure.

Umbrella/excess liability, particularly for higher-risk trades (roofing, excavation, structural work) or larger contract values, where the underlying GL limits alone may not be enough to cover a serious claim.

Setting Requirements That Actually Match the Risk

A one-size-fits-all insurance requirement sheet is easier to administer, but it can either be needlessly expensive for low-risk subs or dangerously insufficient for high-risk trades. The requirements should scale to the actual exposure: type of work, project size, and the specific risks that trade carries.

Subcontractor Default Insurance — A Related but Separate Tool

Some GCs also use subcontractor default insurance (SDI), which is a different product from the liability requirements above — SDI covers the GC's own costs if a subcontractor defaults on the work itself, rather than covering third-party injury or property damage claims. It's worth understanding as a separate risk-transfer tool, but it doesn't replace the liability, additional insured, and workers' comp requirements above.

The Requirement Is Only the Starting Point

Setting the requirement in your subcontract template is the easy part. The harder, and more commonly neglected, part is verifying — before the sub steps on site, and on an ongoing basis for multi-month projects — that the coverage actually exists, actually meets the stated limits, and actually stays in force for the duration of the work.

General information only — not legal advice or a substitute for advice from a licensed insurance professional about your specific program. Appropriate limits and requirements vary by trade, project, contract value, and state.