Before a general contractor or builder lets your crew on a job, they'll ask for proof of insurance. What they ask for depends on the job, the state and their own insurer, but the list is usually the same few policies. Here's what each one is for and how to get the certificate they want.
This guide is general information, not insurance or legal advice. Requirements vary by state and by contract. Ask a licensed insurance agent what your business needs.
General liability
Commercial general liability covers damage you cause to someone else's property and injuries to people who aren't your employees. A roofer who drops a bundle on a car, or a plumber whose fitting floods a finished basement, is what it's for. It's the policy almost every contractor asks for first. Limits of $1 million per occurrence and $2 million aggregate are a common ask on residential work, and some contractors and commercial jobs ask for more.
Workers' compensation
Workers' comp covers your employees if they're hurt on the job. Most states require it once you have employees, and the rules for sole owners and small crews vary by state. Many contractors require it from every sub because if you don't carry it, their policy may end up covering your crew, and their insurer charges them for it. If you're a sole owner with no employees, ask your state about an exemption or certificate of non-coverage.
Commercial auto
Trucks and trailers used for work usually need a commercial auto policy. A personal auto policy may not cover a work truck on a jobsite. Contractors often list commercial auto limits on their insurance requirements.
Umbrella or excess liability
An umbrella adds limits on top of your general liability and auto policies. Larger builders and commercial contractors often ask for one so the total limit is high enough for their jobs.
Words you'll see in insurance requirements
- Additional insured. The contractor is added to your general liability policy for claims from your work on their job. It takes an endorsement from your insurer, not just a line on the certificate.
- Waiver of subrogation. Your insurer agrees not to go after the contractor to recover a claim it paid. Also an endorsement.
- Primary and noncontributory. Your policy pays first, before the contractor's policy is used.
- Certificate holder. The company the certificate is made out to, usually the contractor hiring you.
Getting a certificate of insurance
A certificate of insurance, usually an ACORD 25 form, is a one-page summary of your policies. Your insurance agent issues it, usually for free and often the same day. Keep a current one ready to send, and ask your agent to send certificates straight to contractors who want them from the agent. When your policy renews, send the new one before the old one expires.
On Contracting Bridge, upload your certificate to earn the Insured badge. Our team reviews it, and the badge shows on every bid until the expiration date on file. Some projects require it, and contractors can still ask you for a certificate made out to them.
For the contractor's side of this, see how to check a certificate of insurance.