Business Structure

Business Insurance for Subcontractors

Every GC and project owner will require proof of your own coverage before you set foot on a job site. Here is what you need to stay hireable.

$55–$200/ monthLow-risk subs (drywall, painting, flooring): $55–$120/month for GL. High-risk subs (roofing, concrete, excavation): $120–$300/month. Add WC and the full package often runs $200–$500/month for a working crew.

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Coverage Types for Subcontractors

These are the key insurance policies most relevant to your business type — ranked by importance.

🛡️

General Liability

Required

GCs require this before you start any job. Typically $1M per occurrence minimum, often $2M aggregate. You will need to name the GC as an additional insured on your certificate of insurance.

👷

Workers Compensation

Required

Required in most states once you have employees. Even as a one-person sub, some GCs and state licensing boards require WC proof. Failure to carry means no work on most commercial projects.

🔧

Inland Marine (Tools & Equipment)

Highly Recommended

Covers your tools and equipment on job sites, in transit, and at temporary storage. Theft from job sites is the #1 property loss for subcontractors. GL does not cover your own tools.

🚗

Commercial Auto

Required

If you drive to job sites, haul materials, or use a work truck, commercial auto is required. Personal auto insurance will deny claims that occur during business use.

☂️

Umbrella / Excess Liability

Recommended

Many larger GCs require $5M or more in total liability. An umbrella policy adds $1M–$5M above your GL and other policies at relatively low cost.

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What You Need to Know

→Without a current COI, GCs cannot legally hire you on most commercial projects and many residential contracts.
→You must name the hiring GC as "Additional Insured" on your policy — check your certificates carefully.
→If you do not carry WC and one of your workers is injured, the GC's carrier may come after you for reimbursement.
→Policy lapses are tracked. If your certificate expires mid-project, you may be removed from the site immediately.
→Insurers often check experience modification rate (EMR/MOD) — a clean safety record keeps your premium down.

What Does It Cost?

$55–$200per month

Low-risk subs (drywall, painting, flooring): $55–$120/month for GL. High-risk subs (roofing, concrete, excavation): $120–$300/month. Add WC and the full package often runs $200–$500/month for a working crew.

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Frequently Asked Questions

What certificate of insurance do subcontractors need?+

Standard requirements: GL ($1M/$2M), WC (statutory limits), possibly commercial auto ($1M combined single limit), and an umbrella if the project requires higher limits. The GC or project owner will tell you exact requirements. Always name them as additional insured and send the COI before starting work.

What happens if I work without insurance as a subcontractor?+

Short term: you cannot legally start the job. Long term: if you damage something or someone is injured and you have no coverage, the GC's carrier will pursue you personally for reimbursement, you can face personal lawsuits, and you will be blacklisted by that GC for future work. The risk-reward calculation does not favor going uninsured.

Can I use the GC's insurance instead of my own?+

No. The GC's policy covers the GC — not subcontractors. In fact, most GC policies exclude subcontractor work or have subcontractor hold-harmless provisions that put liability back on the sub. Subs must carry their own policies.

How do I name someone as additional insured?+

Contact your insurance carrier or log into your policy portal and request an additional insured endorsement for the GC or project owner. On ERGO NEXT, you can add additional insureds and download updated certificates within your online account — no phone calls required.

Does my subcontractor GL cover materials I install?+

Your GL covers damage you cause during installation — not defects in the materials themselves. If materials fail after installation, that is typically a products liability claim (often covered under GL) or a workmanship warranty issue. Know exactly what your policy covers and does not cover for completed operations.

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