General Contractors Insurance Requirements

What property managers need to verify before hiring

Risk Level: high

Typical GL: $1,000,000/$2,000,000

General contractors serve as the primary point of contact for construction projects in property management, coordinating multiple subcontractors and assuming overall responsibility for project delivery. From a risk management perspective, the GC's insurance is the first line of defense for claims arising from any aspect of the project. Property managers must verify that the GC carries robust coverage because they are liable for subcontractor errors, workplace injuries, and project delays. Require general contractors to carry a minimum of $1M/$2M in GL, though $2M/$4M is standard for projects exceeding $500K in contract value. Critically, verify that the GC requires all subcontractors to carry their own insurance and can provide COIs for every sub on the project. The GC's policy should not be the sole source of coverage — each subcontractor should carry independent GL, WC, and auto coverage. Request the GC's subcontractor insurance requirements as part of your due diligence. General contractors should also carry contractor's professional liability (errors and omissions) if they provide any design-build services or project management consulting. This covers claims arising from design errors, specification mistakes, and project management failures that standard GL does not cover. For large projects, verify that the GC has a project-specific safety plan and that their EMR is at or below 1.0.

Recommended Insurance for General Contractors

Coverage Type	Recommended Minimum	Notes
Commercial General Liability	$2,000,000 / $4,000,000	Must include completed operations, products-completed operations aggregate, and independent contractors coverage. Verify the policy does not exclude subcontractor work.
Workers' Compensation	Statutory limits	Must cover all employees on the project. Verify the GC is not misclassifying workers as independent contractors to avoid WC coverage.
Umbrella / Excess Liability	$2,000,000	Essential for projects over $500K. For large commercial projects, $5M–$10M umbrella coverage is common. Verify the umbrella follows form over GL, auto, and employers' liability.
Builder's Risk	Full project value	Covers the structure and materials during construction against fire, weather, theft, and vandalism. Typically purchased by the property owner or GC depending on the contract.
Professional Liability (E&O)	$1,000,000	Required if the GC provides any design-build services, value engineering, or construction management consulting. Standard GL does not cover professional errors.

Common Risks

Vicarious liability for subcontractor injuries and property damage

Construction defects discovered after project completion

Delays causing tenant displacement and lost rental income

OSHA violations and resulting penalties from jobsite safety failures

Property damage from demolition, excavation, or structural modifications

Disputes over scope of work leading to mechanic's lien filings

Workers Compensation

The applicable WC code depends on the GC's role. Pure project supervision is classified under 5606 or 8227. GCs who perform hands-on work are classified under the applicable trade code. Rates for supervisory codes typically range from $2.00 to $6.00 per $100 of payroll.

NCCI Code	Description
5403	Carpentry — General Contractor Supervision
5606	Contractor — Executive Supervisor
8227	Construction — Project Manager, Superintendent

Additional Insured Requirements

Require additional insured status on the GC's GL and umbrella policies for the property owner, management company, and any lender or equity partner. Ensure the GC requires the same additional insured coverage flowing down to all subcontractors. Use CG 20 10 and CG 20 37 endorsements. Waiver of subrogation on GL, WC, and umbrella is standard for commercial GC contracts.

General Contractors Requirements by State

Insurance requirements vary by state. Select a state to see specific minimums, licensing requirements, and compliance notes for general contractors in that state.

Related Trades

Electricians Plumbers Hvac Roofing

Frequently Asked Questions

What insurance should I require from a general contractor's subcontractors?▼

Every subcontractor should carry their own GL ($1M/$2M minimum), workers' compensation (statutory limits), and commercial auto ($1M CSL). The GC should collect and maintain COIs from all subs before they begin work. Do not rely solely on the GC's policy to cover subcontractor claims — if a sub is uninsured, the claim may flow up to the GC's policy, depleting coverage available for other claims.

What is a per-project aggregate endorsement and when do I need it?▼

A per-project aggregate endorsement ensures that the GC's full aggregate limit applies separately to each project, rather than being shared across all projects the GC is working on simultaneously. Without this endorsement, claims on other projects could deplete the aggregate limit available for your project. Require this endorsement whenever the GC is working on multiple projects concurrently.

How do I protect against construction defect claims after the project is done?▼

Require the GC to maintain completed operations coverage for a minimum of 3–5 years after project completion (10 years in states with longer statutes of repose). Verify that your additional insured status extends to completed operations via CG 20 37. Include contractual indemnification provisions and a requirement that the GC notify you if completed operations coverage is cancelled or non-renewed.

Should I require the GC to carry professional liability insurance?▼

Yes, if the GC is providing any design-build services, construction management, or project management consulting. Standard general liability policies exclude professional services — meaning design errors, specification mistakes, or project management failures would not be covered. A $1M professional liability (E&O) policy is the minimum for most commercial projects.

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