Requiring proper insurance from every subcontractor before they set foot on your job site is one of the most important risk management practices in the roofing industry. If a subcontractor causes an injury or property damage and does not carry adequate insurance, the claim flows uphill to you as the general or prime contractor. Your insurance premiums increase, your EMR is affected, and your own policy limits are eroded to pay for someone else's loss. Establishing and enforcing strict subcontractor insurance requirements protects your bottom line and your ability to win future contracts.
At minimum, require every roofing subcontractor to carry the following coverages with these baseline limits. Commercial general liability: $1,000,000 per occurrence, $2,000,000 general aggregate, $2,000,000 products-completed operations aggregate. Workers' compensation: statutory limits as required by the state where the work is performed, with employer's liability limits of at least $500,000/$500,000/$500,000. Commercial auto liability: $1,000,000 combined single limit. Umbrella or excess liability: $1,000,000 to $5,000,000 depending on the project size and your contract requirements from the GC or owner above you.
In addition to minimum limits, require the following endorsements on the subcontractor's general liability policy. Additional insured endorsement (CG 20 10 for ongoing operations and CG 20 37 for completed operations) naming your company, and where required, the project owner and GC above you. Primary and noncontributory endorsement (CG 20 01 or equivalent) ensuring the sub's policy responds first before your own. Waiver of subrogation endorsement (CG 24 04 or equivalent) preventing the sub's insurer from seeking reimbursement from you after paying a claim.
Workers' compensation compliance is particularly critical. If a sub does not carry workers' comp coverage, your own workers' comp insurer will include the sub's payroll in your premium calculation at your policy audit. Under NCCI class code 5551 rates, this can add thousands or tens of thousands of dollars to your premium for each uninsured sub. In addition, many states impose penalties on contractors who hire uninsured subcontractors, including fines, license suspension, and in some states, criminal liability if an uninsured worker is injured.
Request a certificate of insurance (COI) from each subcontractor before they begin work, and verify the following information. The policy is current and covers the dates of your project. The limits meet or exceed your requirements. Your company is listed as an additional insured. The endorsements you require are referenced on the certificate or attached as separate endorsement pages. The certificate holder address matches your company's correct legal name and address. The insurer is rated A- VII or better by A.M. Best, ensuring financial strength to pay claims.
Do not rely solely on the COI. A certificate of insurance is an informational document that does not confer coverage rights by itself. The actual endorsements on the sub's policy are what provide your additional insured status and other protections. Request copies of the actual endorsements from the sub's broker and keep them on file. If a claim arises and the endorsement is not actually on the sub's policy, the COI alone will not protect you.
Implement a tracking system to monitor subcontractor insurance compliance across all active projects. Many contractors use certificate management software or services that automatically track expiration dates and send alerts when policies are about to lapse. For smaller operations, a simple spreadsheet tracking sub name, COI expiration date, workers' comp expiration date, and additional insured status can be effective if reviewed weekly.
Include indemnification and insurance requirements in your written subcontract agreement. The subcontract should specify the minimum coverage limits, required endorsements, obligation to maintain coverage for the duration of the project plus a specified period after completion, and the sub's agreement to defend and indemnify you for claims arising from their work. Have your attorney draft or review these provisions to ensure they are enforceable in your state, particularly given that many states have anti-indemnity statutes that limit the scope of contractual indemnification in construction.