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
Limits of $1 million per occurrence and $2 million aggregate are a common baseline for residential work. Commercial contracts often ask for more, sometimes $2 million per occurrence and $4 million aggregate, and larger projects want more still, which usually means umbrella coverage.
Your GL responds to third-party claims for bodily injury and property damage arising from your operations, and to claims from finished work through products-completed operations coverage, subject to the policy's terms and exclusions.
California doesn't require GL for most licenses, but a license held by an LLC must carry liability insurance of at least $1 million (more for larger LLCs, up to $5 million) and post a $100,000 employee/worker bond.
Workers' Compensation
Mandatory in California if you have any employees. It covers your direct employees, not subcontractor workers, but there's a catch: if a sub is unlicensed when a license is required, California law can treat the sub's workers as your employees, which puts injuries on your policy. Classification depends on what work your employees actually perform.
Starting January 1, 2028, nearly every California license, including B general building licenses, must carry workers' comp even with no employees (see our SB 216 guide). In Texas, by contrast, workers' comp is optional for most private employers, though many GCs and owners require it by contract (see our Texas contractor insurance page).
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. Usually the most cost-effective way to reach the higher total limits larger projects demand. See our umbrella insurance guide.
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, since a certificate alone doesn't change the policy. Track certificate expiration dates and require renewals. Verify each sub's license and workers' comp status on the CSLB website. Our subcontractor insurance agreements guide covers contract language.
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. Our builder's risk guide explains how it works.
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?
No. Your coverage protects against claims from your operations, and as the GC you'll usually be named in claims involving your subs' work too. Sub insurance, with you as an additional insured, is a second layer of protection, not a replacement. 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.
Get a general contractor insurance quote
See what general contractors need in California, Nevada, Arizona, and Texas on our general contractor insurance page, or request a free quote.