Subcontractor Insurance
Requirements in California
California general contractors are legally exposed if their subcontractors are uninsured. This guide covers what coverage to require, how to verify COIs, and how to protect your business from uninsured sub liability.
What Insurance Must California Subcontractors Carry?
Most California general contractor agreements require subcontractors to carry the following minimum coverages. Always verify with your specific contract requirements.
| Coverage Type | Typical Minimum | Required By | Notes |
|---|---|---|---|
| General Liability | $1M/$2M CSL | Most GC agreements | GC should be named as Additional Insured |
| Workers' Compensation | CA statutory limits | CA Labor Code §3700 | Required if sub has any employees |
| Commercial Auto | $1M CSL | Most GC agreements | For all vehicles used on project |
| Umbrella / Excess Liability | $1M–$5M | Large projects / public works | Sits above GL and Auto |
| Professional Liability (E&O) | $1M per claim | Design-build subs | For subs providing design services |
| Pollution Liability | $1M per occurrence | HVAC, asbestos, excavation subs | Required for hazmat trades |
How to Verify a Subcontractor's COI
A Certificate of Insurance (COI) is only as good as the policy behind it. Follow these steps to properly verify subcontractor insurance before work begins.
Request the ACORD 25 Form
The ACORD 25 is the standard Certificate of Liability Insurance form. It lists the sub's GL, WC, Auto, and Umbrella limits, carrier names, policy numbers, and effective dates.
Verify Your Name as Additional Insured
Your company name must appear in the 'Additional Insured' section of the COI. If it doesn't, request an AI endorsement before work starts.
Check Policy Expiration Dates
Verify the policy is active for the entire duration of the subcontract. Request updated COIs before any policy expires during the project.
Call the Carrier to Verify
COIs can be forged. For large projects, call the carrier directly to verify the policy is active and the limits match the COI. The carrier name and phone number are on the ACORD 25.
Check WC Coverage Separately
WC coverage appears on a separate ACORD 25 section. Verify the sub's WC policy covers all employees who will work on your project.
Keep COIs on File
Maintain a COI file for every subcontractor. Your WC carrier will request these during the annual payroll audit — uninsured sub wages will be added to your payroll.
The Uninsured Subcontractor Risk
Under California Labor Code §3706, if a subcontractor without workers' comp is injured on your job site, you may be held liable as the "statutory employer" — responsible for all medical costs and lost wages. This is one of the most common and costly exposures for California general contractors.
Always collect COIs before subs start work. No COI = no work on your site.
Frequently Asked Questions
What insurance must California subcontractors carry?
California subcontractors typically must carry: General Liability ($1M/$2M minimum), Workers' Compensation (required by law if they have employees), and Commercial Auto if they use vehicles. Many GC agreements also require Umbrella/Excess Liability.
What happens if a subcontractor doesn't have workers' comp?
If a subcontractor without workers' comp is injured on your job site, you may be held liable as the 'statutory employer' under California Labor Code. Their wages may also be added to your WC payroll audit, significantly increasing your premium.
What is an additional insured endorsement?
An additional insured endorsement adds your name to the subcontractor's GL policy. This means you receive protection from claims arising from the sub's work. Most GC agreements require subs to add the GC as an additional insured.
How do I verify a subcontractor's insurance?
Request a Certificate of Insurance (COI) — ACORD 25 form — from every subcontractor before they start work. Verify the policy is active, limits meet your requirements, and your company is listed as additional insured.
Need Subcontractor Insurance or COI Verification Help?
Whether you are a GC needing to verify sub coverage or a subcontractor needing to get covered quickly, Asena Capital Insurance Services can help.
· Same-business-day COI processing, subject to carrier availability