Subcontractor insurance requirements come from two places: state and federal law, and the subcontract you sign. The law mostly decides whether you must carry workers’ compensation. The contract decides almost everything else, including general liability limits, commercial auto, excess coverage, additional insured status and proof of coverage. If you hire subs, you set and verify those terms. If you are a sub, you meet them before you bid.
TL;DR
- Workers’ compensation is a legal requirement for subcontractors with employees in every state except Texas, according to Procore’s guide to subcontractor insurance. Most other requirements are contractual.
- General contractors commonly expect general liability, commercial auto and workers’ compensation. Specialty work can add pollution or rigger’s liability.
- Limits depend on the risk and jurisdiction. One industry manual points to $5 million in general liability limits for construction risks and $2 million for other contracts.
- A certificate of insurance alone does not prove additional insured status. Ask for the endorsement.
- An uninsured subcontractor can leave the general contractor holding the bill, so verify before work starts.
Table of Contents
- Which requirements come from law and which from the contract
- The coverages general contractors ask for most
- How much coverage is enough
- Endorsements matter as much as limits
- Are subcontractors covered under the general contractor’s policy?
- How to verify a subcontractor’s insurance
- What happens if a subcontractor has no insurance
- Requirements for trucking and transportation subcontractors
- Our perspective
- Get quotes that match your contract
- A checklist to use before every bid
- FAQ
- Sources
Which requirements come from law and which from the contract
What does the law actually require of a subcontractor?
Less than most people think. There is no single national rule that says every subcontractor must carry a particular policy. The clearest legal mandate is workers’ compensation. Procore reports that in every state besides Texas, subcontractors with employees are legally required to have workers’ compensation. The details differ by state: who counts as an employee, whether sole proprietors can opt in, and what penalties apply for going without coverage.
Public work adds another layer. Federal contracts carry their own insurance rules, and the Federal Acquisition Regulation at 48 CFR 28.307-2 sets out the liability insurance that applies to federal contractors, including workers’ compensation and specific liability coverage levels. State agencies do something similar. Louisiana, for example, publishes a manual explaining that agency insurance requirements are typically set out in bid specifications and contract documents, which may mandate minimum coverages and additional insured endorsements.
Where does the contract come in?
Everywhere else. General liability, commercial auto, umbrella or excess limits, pollution coverage, waivers of subrogation and primary and non-contributory wording are normally contract terms. They bind you because you agreed to them, not because a statute names them. That is why two subs doing similar work for two different general contractors can face very different insurance sections.
Your first step on any job is to read the insurance article of the subcontract and any attached exhibit before you price the work. The cost of meeting those terms belongs in your bid.
The coverages general contractors ask for most
What types of insurance do subcontractors typically need?
Procore notes that many general contractors will only hire subs who carry general liability, commercial auto and workers’ compensation. Here is what each does and why it appears in nearly every subcontract.
General liability. Commercial general liability is treated as the foundation. It typically responds to third-party bodily injury, property damage and the legal defense costs that come with those claims. A sub who damages a finished floor or injures a visitor on site relies on this policy. If you need to price it, our general liability coverage page lets you request quotes online. Our explainer on what general liability covers walks through the basics.
Workers’ compensation. This covers medical costs and lost wages for your employees injured on the job. It is the one coverage most states require by law once you have employees, and general contractors want proof of it because of the exposure discussed below. You can start a quote through our workers’ compensation page.
Commercial auto. If your crew drives to sites, hauls materials or tows equipment, a personal auto policy is usually not enough. Our guide on when commercial auto replaces personal auto lists the triggers. Subs who haul freight as part of the job need trucking coverage, which we cover below.
Specialty coverages. Some work brings its own requirements. A published subcontractor exhibit from one contractor states that pollution liability may be required when you handle hazardous materials or create specific environmental exposures, and that rigger’s liability is required when the work involves moving, lifting, lowering, rigging or hoisting property or equipment. Treat that exhibit as one example of how a contract can be written, not a universal rule.
How much coverage is enough
What limits do general contractors and project owners require?
There is no standard number. Limits track the risk of the work, the size of the project and the jurisdiction. A widely used industry manual on insurance requirements in contracts recommends $5 million in general liability limits for construction risks and $2 million for other contracts, and notes that limits vary with the risk and jurisdiction. That figure is typically reached through a combination of primary and umbrella or excess coverage, not a single policy.
The published contractor exhibit mentioned above shows the same layering in practice: its excess liability requirement is at least $4,000,000, on top of a primary liability limit. Your own contract may ask for more or less, which is why you read it first.
A practical way to approach the numbers:
Start with the contract, then check the biggest job you want to win. If you plan to bid on larger commercial projects, the limits you carry today may not clear the next requirement. Raising limits through an umbrella is often more efficient than raising every primary policy. Our umbrella policy guide explains how that layer works for fleets, and the same logic applies to any operation with vehicles on the road.
Match limits to what a bad claim would cost you. A requirement is a floor set by someone else. A serious injury or a multi-vehicle accident can exceed a minimum limit. Our trucking liability limits guide shows how to think about that gap for vehicle exposure.
Endorsements matter as much as limits
What is an additional insured endorsement and why do contracts demand it?
Additional insured status extends your liability policy so that the general contractor or project owner is protected for claims arising from your work. Contracts also commonly ask for waivers of subrogation, which stop your insurer from pursuing the general contractor after paying a claim, and for wording that makes your policy primary and non-contributory, so yours responds first.
These are not automatic. They are added by endorsement, and the wording of the endorsement controls how much protection the other party actually gets. When you request a quote, tell the agent or platform exactly which endorsements the subcontract names so the policy is built to match the paperwork. Our guide to common coverage exclusions is a useful check on what could still fall outside a policy once it is issued.
Are subcontractors covered under the general contractor’s policy?
Usually not, unless a specific program says so.
A general contractor’s standard policy is built for its own operations. The main exception is a controlled insurance program, often called a wrap-up. The Associated General Contractors of America explains that such a program can cover enrolled contractors and subcontractors at the project site, with coverage that varies by program.
There is a catch for enrolled subs. The same AGC paper warns that participants must be cautious because their own corporate policies often contain wrap-up exclusions that may leave them uninsured for project-specific risks. If you are asked to enroll in a wrap-up, read your own policy’s exclusions and talk to your agent before you sign. You still need coverage for your work off the project site and for anything the program does not include.
How to verify a subcontractor’s insurance
What should you check before a sub starts work?
The certificate of insurance is the starting point, not the finish. It is a summary of coverage on a given date. The industry manual cited earlier advises verifying coverage with a certificate together with the specific additional insured endorsements and, when required, waivers of subrogation, and states that a certificate alone is insufficient to confirm additional insured status. A law firm that advises contractors makes a similar point: a certificate does not promise that coverage actually exists, so contractors must confirm it independently.
A verification routine that works for most contractors, in plain order:
Collect documents before mobilization. Request the certificate, the additional insured endorsement, the waiver of subrogation if required, and the workers’ compensation certificate. Do not let a crew on site while paperwork is pending.
Match the certificate to the contract line by line. Compare each limit, each coverage type, the policy period and the named insured against the subcontract. The legal name on the certificate should match the entity that signed.
Check the policy period against the job schedule. If a policy expires mid-project, calendar the renewal and request an updated certificate before the old one lapses. A lapse in coverage is the most common gap on long jobs.
Confirm the carrier. Contact the agent listed on the certificate to confirm the policy is active, and keep the answer on file.
Repeat for lower-tier subs. Your sub’s subs can create exposure that travels back up the chain. Require flow-down insurance clauses in each tier of the contract.
If your subs include haulers or equipment movers, you also care about regulatory compliance on the road. This overview of DOT compliance for trucking companies shows the inspection and maintenance side that sits alongside insurance when you verify transportation vendors.
What happens if a subcontractor has no insurance
Who pays when an uninsured sub is injured or causes damage?
Often the general contractor. The Missouri Department of Labor explains the workers’ compensation version plainly: when a subcontractor chooses not to buy a policy, the sub is uninsured, and the general contractor may become liable for injuries the subcontractor suffers on the job. The same page adds that the general contractor’s own insurer may be required to pay claims and may charge premium for the uninsured sub, unless the general contractor can show that the sub secured its own coverage. Rules differ by state, so check your state’s workers’ compensation agency.
The liability side works through the contract. If a sub without adequate general liability damages property or injures a third party, the injured party can look to everyone with a connection to the work, which frequently includes the general contractor and the project owner. Hold-harmless and indemnity clauses in your contract only help if the sub has the insurance or assets to back them up.
The practical consequences for a sub without required coverage are just as direct: contract breach, withheld payment, removal from the job, and disqualification from future bids. Fixing coverage before you sign is far cheaper than any of those outcomes.
Requirements for trucking and transportation subcontractors
How do requirements change when the sub hauls freight?
Trucking subs face the same contract-driven structure with a different set of policies. Instead of ordinary commercial auto alone, you typically need primary liability for the trucks, and many contracts also ask for cargo coverage and physical damage. Shippers and brokers write their own limits into carrier agreements, so read them as you would a construction subcontract.
If you operate trucks, these pages cover each layer: what kind of insurance you need for a trucking company, how much insurance a trucking company needs and the coverages fleets most often overlook. For cargo exposure in particular, our look at cargo policy coverage gaps explains where claims commonly go unpaid.
Our perspective
We see the same pattern across trucking and commercial clients: the policy is rarely the problem. The paperwork is. A business buys coverage that looks right, then finds out at contract time that the certificate lacks an endorsement, the limit sits one tier too low, or the policy period ends before the job does.
That is why we built Diamondback Insurance around speed and choice. You can request quotes from multiple insurers in one place, compare options side by side and buy online in minutes. When a general contractor, broker or shipper gives you a deadline, a slow quote process can cost you the work.
Our advice is simple. Get the insurance article of the contract in hand first. Then build the program around it: the right primary policies, an umbrella if the limits call for it, and the endorsements spelled out. Review it at every renewal and before every larger bid. We offer trucking, general liability, workers’ compensation, business owners and commercial auto coverage through the same online process, so a growing contractor does not have to chase separate providers for each requirement.
Vladimir
Get quotes that match your contract
If you already know what your subcontract requires, you can compare quotes for general liability, workers’ compensation, business owners and trucking coverage through Diamondback Insurance. We gather offers from multiple insurers so you can compare, customize and purchase online. Start on our instant online quote page and have the contract’s insurance section open as you go.
Trucking operators can go straight to trucking insurance, and contractors with employees can start with workers’ compensation. If you need a package for a small business, see our business owners coverage.
A checklist to use before every bid
What should you confirm before you sign?
Read the insurance article and every exhibit it references. List each coverage and limit named, and note whether excess or umbrella is allowed to satisfy the number. Identify every endorsement requested: additional insured, waiver of subrogation, primary and non-contributory wording, notice of cancellation. Check whether the project is enrolled in a wrap-up program. Confirm whether the contract requires the same coverage from your own subcontractors. Confirm the length of time coverage must stay in force, since some contracts ask for completed operations coverage for a period after the work ends.
Then price the program, request quotes with those requirements in hand, and put the insurance cost into your bid. Contractors who treat insurance as a line item rather than an afterthought win more jobs and spend less time on corrections after award.
FAQ
Do subcontractors need their own insurance?
In most cases, yes. A general contractor’s policy is not designed to cover a subcontractor’s operations unless a wrap-up program says otherwise. Workers’ compensation is legally required for subcontractors with employees in every state except Texas, and the contract will usually require general liability and often commercial auto as well.
How much general liability do subcontractors need?
It depends on the contract and the risk. Industry guidance points to $2 million for many contracts and $5 million for construction risks, often reached with an umbrella or excess policy. Smaller jobs may ask for less, and public or large commercial projects may ask for more. Your subcontract states the number.
Is a certificate of insurance enough proof?
No. A certificate summarizes coverage but does not by itself confirm additional insured status or other endorsements. Request the endorsement pages and any required waivers, and confirm the policy is active with the agent.
What happens if my subcontractor doesn’t have insurance?
You may end up responsible. For workers’ compensation, states such as Missouri note that a general contractor can become liable for an uninsured sub’s injuries, and its own insurer may charge premium for that sub. Liability claims can also reach the general contractor through the contract chain.
Sources
- 48 CFR § 28.307-2, Liability (Cornell Legal Information Institute)
- 7 Types of Insurance Policy Every Subcontractor Needs (Procore)
- Exhibit C, Subcontractor Insurance Requirements
- Insurance Requirements in Contracts 2025.1
- Controlled Insurance “Gotchas” (Associated General Contractors of America)
- Procedures Manual for Insurance Language in Contracts (Louisiana Division of Administration)
- Workers’ compensation and general contractors (Missouri Department of Labor)
- A Guide to DOT Compliance for Trucking Companies