What goes into subcontract insurance requirements: a field guide for GCs and brokers

Why the exhibit matters more than the certificate

Everything a GC can check on a certificate traces back to one document: the insurance section of the subcontract, usually an exhibit. If the exhibit is vague, the review is vague. If it's specific, a reviewer can mark each line pass or fail.

Most exhibits are built from the same parts. Here they are, with how two public owners wrote them: Oregon DOT's subcontractor exhibit and Sonoma County's construction template, both published online.

1. Coverages and limits

The base layer is commercial general liability, auto liability, workers' comp with employer's liability, and an umbrella or excess policy that can stack on top of the primary limits.

Oregon DOT's exhibit asks for $1 million per occurrence and $2 million aggregate on an occurrence-form general liability policy, $1 million combined single limit on auto, statutory workers' comp and $500,000 employer's liability. It lets primary and excess combine to meet the minimums, as long as the excess is true following form.

Sonoma County scales the general liability limit to the job. Its template runs from $1 million per occurrence with $2 million aggregates on projects under $1 million, to $10 million across the board at $10 million and up. Trade contractors get their own, lower tiers: framing, mechanical and electrical trades carry more than other trades.

For the reviewer: a limit that scales with project size has to be checked against this project's tier, not a standard number.

2. Additional insured status

The exhibit names who must be added, for which operations, and on what form.

Oregon DOT names the state, the Oregon Transportation Commission and ODOT, and their people, on general liability and auto. It names the forms: CG 20 10 07 04 for ongoing operations and CG 20 37 07 04 for completed operations, or equivalent. It requires the endorsements to be submitted with the certificates.

Sonoma County names the county and its people for ongoing and completed operations, without naming form numbers in its standard language. It is blunt about proof: the template says a certificate alone is not sufficient for additional insured or primary and noncontributory status. See additional insured.

3. Primary and noncontributory

This wording makes the trade's policy pay first. Both exhibits require it: Oregon DOT on all liability coverage except workers' comp and employer's liability, Sonoma County as a stated requirement with an endorsement as evidence. See primary and noncontributory.

4. Waiver of subrogation

A waiver stops the trade's carrier from recovering what it paid from the GC or owner. Sonoma County requires a waiver endorsement on workers' comp and a written waiver in favor of its additional insureds. Oregon DOT's exhibit doesn't state one. See waiver of subrogation.

5. Aggregates and completed operations duration

Sonoma County requires the general aggregate to apply separately to each project, which is what a per project aggregate endorsement does. It also sets how long completed operations coverage must last after the work and guarantee period: one year under $1 million, two years up to $5 million, three up to $10 million, and five years at $10 million and up.

For the reviewer: duration requirements have to be diaried for years after the job closes. See completed operations.

6. Carrier quality and deductibles

Sonoma County requires insurers rated at least A:VII by A.M. Best, other than California's State Compensation Insurance Fund, and requires owner approval for deductibles over $25,000. Oregon DOT requires insurers authorized in Oregon and acceptable to the grantee.

7. Notice, renewal and delivery

Oregon DOT asks for 30 days' written notice before cancellation, material change, potential exhaustion of aggregate limits or non-renewal, and requires certificates before the trade performs. Sonoma County requires renewal evidence at least 10 days before expiration and certified policy copies within 30 days of a written request.

A checklist for your own exhibit

1. Coverages and limits, scaled to the project if that's your practice.
2. Additional insured: who, ongoing and completed, and the forms you'll accept.
3. Primary and noncontributory on each liability policy.
4. Waivers of subrogation on each policy you need them on, including workers' comp.
5. Per project aggregate, if you need it.
6. Completed operations duration in years.
7. Carrier rating and deductible limits.
8. Proof: certificate plus endorsements, before work, and renewals before expiration.

Then read every certificate against it. Our method paper How to read a COI against requirements shows how.