How to Vet Your Subs Before They Cost You Everything

Here is a scenario that happens every week somewhere in the US. A general contractor hires a roofing subcontractor — someone from their community, someone they've worked with for years, someone they trust. The sub falls through a skylight. The sub has no workers' comp. No general liability.

The GC is now responsible for everything. The medical bills. The lost wages. The lawsuit. Potentially the business.

Trust is not a substitute for insurance verification. This guide tells you exactly what to check, how to check it, and what to do when a sub can't meet your requirements.

Why uninsured subs are your problem, not theirs

When a subcontractor works on your site, any injury or property damage they cause can flow back to you. Here's the legal reality:

• Workers' compensation: If the sub doesn't carry workers' comp and their employee is injured, you become the 'statutory employer' — liable for the injury as if the worker were yours.
• General liability: If the sub damages a neighboring property or a visitor is injured due to their work, a claim will be filed against your policy if theirs doesn't cover it.
• Completed operations: If the sub installs faulty work that causes damage after the project closes, liability follows you — especially if you were the prime contractor on the job.

The 4 documents you must collect from every subcontractor

1. Certificate of Insurance (COI)

A COI is a one-page summary of a contractor's insurance policies. It lists the carrier, policy numbers, coverage types, limits, and expiration dates. It is the starting point for verification — but not the end.

Critical: A COI can be forged or outdated. Always verify directly with the carrier by calling the number on the certificate. Ask them to confirm the policy is active and the coverage has not been cancelled.

2. Workers' Compensation Certificate

This is separate from the general liability COI. Confirm:

• The policy is active with no lapse in coverage
• The policy covers all states where the sub will be working
• The employer listed on the certificate matches the entity you're hiring
• The policy was not recently reinstated after a lapse (a red flag for financial instability)

3. Additional Insured Endorsement

You should be listed as an additional insured on the sub's general liability policy. This gives you direct coverage under their policy if a claim arises from their work. Request the actual endorsement, not just a note on the COI saying 'additional insured applies.'

The endorsement should cover both ongoing operations (while the sub is working) and completed operations (after the project closes).

4. Waiver of Subrogation

A waiver of subrogation prevents the sub's insurance carrier from coming after you if they pay a claim that was partially your fault. Without it, you could be sued by your own sub's carrier after a loss. Require this in your subcontract agreement.

Minimum coverage requirements — what to demand

Adjust these minimums based on the risk of the work. A painting sub needs different minimums than a crane operator. Your insurance broker can help you set trade-specific requirements.

How to actually verify a certificate (step by step)

1. Receive the COI — request it before the sub mobilizes, not on the first day of work
2. Check the expiration dates on all policies — if any expire during your project, require renewal certificates before expiration
3. Check the additional insured section — your company name must appear as an additional insured
4. Call the carrier's verification line — the phone number on the certificate, not one you found online
5. Confirm the policy is active, covers the work type, and covers your geographic area
6. File the certificate — keep it accessible for the duration of the project plus 3 years
7. Re-verify at renewal — if the project runs longer than 12 months, get updated certificates when policies renew

What to do when a sub can't meet your requirements

Small subs sometimes can't afford full coverage. You have three options:

Option 1: Require it and hold firm

The cleanest solution. Make minimum insurance requirements a non-negotiable part of your subcontract agreement. If the sub can't meet it, don't hire them. This protects you completely.

Option 2: Wrap them into your own policy

Some policies allow you to add subs as covered parties under your own general liability. This is called a 'wrap-up' or OCIP (Owner Controlled Insurance Program). It costs more but guarantees coverage. Talk to your broker.

Option 3: Adjust the scope

If a trusted sub only lacks coverage for a specific risk (say, completed operations), you may be able to restructure their scope to eliminate that exposure while still using them for work they can safely insure.

FAQ: Subcontractor insurance

Am I responsible for a sub's worker if they get hurt on my site?

In most states, yes — if the sub lacks workers' comp coverage, you can be held liable as the statutory employer. The injured worker can file against your policy. This is why verification before mobilization is non-negotiable.

What is the difference between a COI and an endorsement?

A COI is a summary document. An endorsement is an actual change to the policy. When you want to be listed as an additional insured, a note on a COI is not enough — you need the insurance company to issue an additional insured endorsement that modifies the policy itself.

How often should I re-verify subcontractor insurance?

At the start of every project, whenever a policy approaches expiration during the project, and any time you expand a sub's scope of work. Set a calendar reminder 30 days before any sub's policy expiration date.

The bottom line

The three words that protect you: verify, document, repeat. Get the certificate before the sub starts. Verify it by phone. Get the additional insured endorsement. File everything. Re-verify at renewal.

The cost of this process is one phone call per sub per year. The cost of skipping it can be your entire business.