GCs Carry the Most Complex Insurance
General contractors sit at the center of every project's risk web. You're responsible for the entire job. When things go wrong anywhere on the project, whether caused by your crews, your subcontractors, or even the design team, claims often flow through you.
This central position requires comprehensive coverage and careful management of subcontractor insurance.
Core Coverage Requirements
General Liability
Minimum limits of $1 million per occurrence and $2 million aggregate are baseline for residential work. Commercial projects typically require $2 million per occurrence and $4 million aggregate. Larger projects want more, which means umbrella coverage.
Your GL covers third-party claims for bodily injury and property damage arising from your operations. It covers claims arising from completed work through products-completed operations coverage.
Workers' Compensation
Mandatory if you have any employees. Covers your direct employees only, not subcontractor workers. Classification depends on what work your employees actually perform.
Commercial Auto
Covers owned vehicles. Add hired and non-owned coverage for rentals and employee vehicles used for work. Limits should match the exposure your operations create.
Umbrella Liability
Additional limits above your primary policies. Often required for commercial and larger residential projects. Cost-effective way to reach the $3 to $10 million limits larger projects demand.
Project-Specific Requirements
| Project Type | Typical GL Requirement | Umbrella | |-------------|----------------------|----------| | Residential remodel | $1M per occurrence | Often not required | | Custom home | $1M to $2M per occurrence | $1-2M | | Commercial tenant improvement | $2M per occurrence | $1-5M | | New commercial construction | $2M or higher | $5-10M |
Review contract requirements before signing. Discovering insurance gaps after you've committed creates expensive problems.
Essential Endorsements
Additional Insured Status
Project owners and developers require you to add them as additional insureds. This extends your coverage to protect them from claims arising from your work. Both ongoing operations and completed operations coverage are typically required.
Primary and Non-Contributory
This language makes your policy respond first, before the additional insured's own coverage. Standard in most commercial contracts.
Waiver of Subrogation
Prevents your insurer from recovering claim payments from the project owner or other parties. Another standard contract requirement.
Managing Subcontractor Insurance
Your exposure extends to your subcontractors. When an uninsured or underinsured sub causes damage or injury, claims flow up to you.
What to Require
General liability limits matching your own requirements. Workers' compensation with statutory limits. Commercial auto for subs with vehicles. You listed as additional insured on their policies. Waiver of subrogation in your favor.
Verification Process
Collect certificates before work begins. Verify limits meet your requirements. Confirm endorsements are actually in place. Track certificate expiration dates and require renewals.
Compliance Enforcement
Don't let uninsured subs on your sites. Ever. The short-term convenience isn't worth the long-term exposure. If a sub can't get insured, that's valuable information about their risk profile.
Builder's Risk Considerations
Construction contracts specify whether owner or contractor provides builder's risk coverage. Read this section carefully. If you're responsible, get the coverage in place before work begins.
Verify who is named as insured on the policy. Understand what's covered and what's excluded. Coordinate your GL with the builder's risk to avoid gaps.
Professional Liability
Consider E&O coverage if you provide design services, offer consulting beyond construction, engage in design-build contracts, or provide pre-construction services that include design elements.
Standard GL doesn't cover professional mistakes. E&O fills this gap.
Common Questions
Can I rely on subcontractor insurance instead of my own?
Absolutely not. Your coverage protects against claims from your operations. Sub insurance protects against their negligence. Both are needed.
What if a sub doesn't have adequate coverage?
Don't let them start work. You can help them find coverage, but don't accept the risk of uninsured subs on your projects.
How much umbrella coverage do I need?
Depends on your project types. Discuss typical contract requirements with your agent and size your umbrella accordingly.