What to require from a subcontractor before they start

What the insurance exhibit has to do

Start from where you sit. Every line you write in the exhibit comes back to you as an attachment — a certificate, an endorsement page, a photo of a license, a tax form. If a requirement cannot arrive as a document you can read and file, it is not a requirement.

So write it in the order it gets read: coverages, limits, endorsements, the documents that are not insurance, then the operational terms. One thing comes first, though.

Check for a wrap-up before you write anything

On some projects the insurance is bought centrally for the whole site. The owner-controlled version is an OCIP; the contractor-controlled one is a CCIP. Everyone enrolled works under a single program for that site, and your sub's own limits stop being what answers — what a wrap-up covers, and what it leaves behind is the longer version.

That changes every requirement below. Enrolled subs bid net of insurance, so demanding their own general liability again pays for the same cover twice. On an enrolled scope the wrap-up manual is what actually decides the cover, and it often lands after the bid.

• Read the manual before the subcontract goes out. Enrollment, deductibles and the safety obligations attached to them overrule your defaults.
• Find what is excluded. Wrap-ups routinely leave out auto liability, tools and equipment, and work off site. Those stay with your sub, so your exhibit still names them.
• Look for form CG 21 54 on your sub's own policy — it removes operations covered by a consolidated program from their general liability.
• Ask how long completed operations run. A program that ends before the defect period leaves a stretch where nobody's policy is the obvious answer.

Off a wrap-up job, the rest of this page applies as written. On one, it is the fallback for what the program hands back.

The coverage lines, and what each one is for

Three lines belong on nearly every subcontract, and a fourth on the jobs that warrant it. Write each for what it does, not because it was on the last exhibit you copied.

General liability

This answers when your sub's work injures someone else, or damages something that is not the work itself. It is where your status on their policy lives, and what a defect claim lands on years after closeout. Require the occurrence form — a claims-made policy responds only while somebody keeps paying for it, which occurrence vs claims-made explains.

Workers' compensation, and employers liability underneath it

Comp pays your sub's injured employee under state rules. Employers liability, Part B on the same policy, answers a lawsuit rather than a benefits claim, and that is the half you are buying. The route to you is the action-over claim: the injured worker takes comp, then sues you as the contractor running the site. So require a Part B figure rather than the word statutory, which describes Part A and carries no limit — employers liability has the boxes. A claimed exemption is settled by your state's rule.

Automobile liability

Anyone driving to your site or hauling for the job needs it. Write owned, hired and non-owned into the clause: a policy scheduling two trucks says nothing when a foreman collects material in his own pickup.

Umbrella or excess

This buys height, not breadth. Require it where the plausible loss runs past the primary limits — occupied buildings, public traffic, work at elevation. Then require it to sit over general liability, auto and employers liability together, and to carry your status up with it, which is what umbrella vs excess is about.

The coverages only some trades need

Standard general liability has holes in it, and which one matters depends on the trade in front of you. Four come up often enough on small work to know by name.

Add these by trade rather than into your standard exhibit. A blanket demand for professional liability from a framing crew reads as a form nobody edited. Whether this job needs any of them is a question for your own agent.

How to arrive at a limit, without copying one

Here is the part most pages skip. Sealinn does not prescribe a figure, and this page will not give you one. A number published to strangers knows nothing about your job, your state or your carrier, and printing it into your subcontract moves somebody else's guess into a document you are bound by. Publishing one would be irresponsible. Six inputs decide it instead, and four are on your desk already.

1. 1Start with the contract above you. What the owner or the prime requires of you is your floor. Requiring less from your sub leaves the difference on your own policy.
2. 2Read the owner's specification, not only the agreement. Insurance requirements often sit in the spec, and sometimes name higher figures than the contract's boilerplate.
3. 3Price the plausible worst case on this job. Occupied building, public sidewalk, work above other trades, water above a finished floor. Not an average job.
4. 4Check what your state does to the clause. Some states void or cap parts of an indemnity, and some restrict comp waivers. What you may require and what you may enforce differ there.
5. 5Ask your own agent and your own counsel. Your carrier's view on what your subs carry surfaces at your renewal. Both views are specific to you, which a published number never is.
6. 6Test the figure against the market you hire in. A limit no sub in that trade carries is one you will waive by email on a Friday.

Your sub's general aggregate is shared across every job they are running, so a claim on somebody else's site can spend the limit you were counting on — per-project aggregate is the endorsement that separates yours.

The endorsements, by form

Cover and status are different things: your sub can carry immaculate limits while you remain a stranger to their policy. Endorsements put you on it, and each is a separate page from their agent. Name them by number, then collect them — the forms by number unpacks each one, edition dates included.

• CG 20 10 — makes you an additional insured for ongoing operations, so their policy answers while the work is in progress.
• CG 20 37 — the same status for completed operations, which responds when a defect surfaces after closeout. Require both; ongoing vs completed is why one is not the other.
• CG 24 04 — the general liability waiver of subrogation, stopping their insurer recovering from you after it pays.
• WC 00 03 13 — the same waiver on the comp policy. Different form, different policy, usually a different carrier, so it is asked for separately.
• CG 20 01 — primary and non-contributory wording, so their policy pays first and yours does not contribute.
• CG 25 03 — a general aggregate dedicated to your project, worth requiring on larger jobs.

Then require the pages, not a line in the description box announcing they exist. Ask their agent, who wrote the certificate and holds the policy file — how to verify a certificate is the routine. A certificate reports what somebody typed; an endorsement is attached to the policy.

The ACORD 25 below is that certificate, annotated. Limits and dates land in its boxes, and two narrow Y/N columns carry the additional-insured and waiver answers — ADDL INSD and SUBR WVD. The other two endorsements — primary and non-contributory, and the per-project aggregate — have no box at all, which is why you collect the pages.

The documents that are not insurance

Three more items belong in the same packet, named with the specificity you gave the endorsements. A clause asking for proof of licensing gets you a photograph of whatever was nearest.

• A signed W-9, before the first payment rather than in January, because it fixes the legal name and taxpayer ID you file against — collecting a W-9.
• The contractor or trade license, named by state and classification rather than as a generic requirement to be licensed, and checked against the board's live register — checking a sub's license.
• Safety certifications, where you require them for site access, with the discipline and the validity window written in your own words — which certifications to require.
• The experience rating worksheet, if your subcontract sets a threshold on their experience modification rate. Ask for the bureau's sheet rather than the number, for the same reason you ask for the endorsement rather than the certificate — a box on your form gets you whatever they typed into it.

Flow-down: your sub's subs are the gap nobody watches

Your framer brings a crew. Your mechanical sub brings an insulator. Nothing you signed reaches those companies, nobody in your office holds their certificate, and that is the most common real hole in an otherwise tidy file.

Exposure does not respect tiers. A second-tier worker hurt on your site sues you, not the sub who hired them, and a company with thin limits and no status in your favor arrives with nothing behind it. At your premium audit that crew reads as uninsured labor. What an uninsured sub actually costs you walks the four routes it reaches you by.

• A flow-down requirement. Your sub imposes these obligations on every lower tier, and names you as additional insured on those policies too.
• A right to the evidence. You may ask for any lower-tier certificate and endorsement, and your sub produces it. Without that sentence you hold a promise you cannot inspect.
• Notice before they subcontract a scope, so you hear about a company you have never met while there is still time to ask for paperwork.

Then use it at least once a job. A flow-down clause nobody exercises is a clause, not a control.

Indemnity is a separate promise, and it has to line up

The insurance exhibit and the indemnity clause do different jobs, and they are usually drafted by different people. Insurance is a third party with money agreeing to pay. Indemnity is your sub agreeing to pay, backed by whatever that company is worth on the day.

Read side by side they should describe one risk. In practice they drift. A subcontract making your sub indemnify you for everything, including your own negligence, sits over a policy that answers for liability their work caused. The contract reaches further than the policy will, and a construction company carries the difference.

• Ask whether the indemnity is insurable where you build. Many states void or narrow one that reaches your sole negligence. A clause your state will not enforce protects nobody.
• Check the endorsement reaches as far as the promise. Additional-insured status responds to what your sub caused; where the indemnity asks for more, ask your agent and your counsel what stands behind the rest.

Neither call is one this page can make. What you can do this week is put both clauses on one screen and read them together.

The terms that make it checkable

A requirement nobody can enforce on a Tuesday morning is decoration. These clauses turn the exhibit into something a person in your office can actually run.

• Evidence before mobilization. No documents, no gate. It is the only leverage that reliably works, and it evaporates once the crew is on site.
• Who sends what. Certificates and endorsements come from their agent; the W-9 comes from your sub, who signs it. Saying so stops your sub forwarding a certificate when you asked for an endorsement page, and stops their agent being asked for a form they never hold.
• Cover maintained through the term and for a stated period after. Completed-operations status is worth little if the obligation ends at final payment.
• Cancellation notice, requested honestly. Ask for it, and do not build your process on it — what that clause is worth explains why the printed expiry date is the reliable thing to run.
• A named consequence. Withholding payment, or your right to buy the cover and charge it back. A requirement with nothing behind it is a request.
• What happens on a lapse — when a sub's insurance expires mid-job is that version, with the crew already working.

Then renewal, where most files quietly rot. Policies renew annually and rarely on your schedule, so the certificate in your folder goes wrong on a date nobody circled. Chase the replacement before the expiry, and ask for the endorsements again — a renewal is a new policy, and a new policy needs its own endorsement pages. Re-check the license in the same email, and keep what you collected, dated, rather than only what is current. Your carrier's auditor asks what was true during the job, not today.

Where Sealinn fits, and what stays with you

Sealinn holds the requirement set — your limits, the endorsements you need, the documents beyond the certificate — and measures every arriving document against it, with a second set that can override the first on one project. Sealinn collects those documents through an upload link your sub uses without an account. Sealinn then counts down to the expiry date filed against each document, with reminders defaulting to 90, 60, 30 and 7 days. On a certificate that means the general liability, workers compensation and auto dates, each on its own timetable — though coverages sharing a date arrive as one message rather than three. An umbrella expiry is not among the fields read off the form, so that one stays with you. The countdown starts once a document is approved and filed as the current one — a certificate still sitting in your review queue is not on a clock. The free tracking template covers most of the same ground, if you are still doing this by hand.

Sealinn ships no opinion about your numbers, so every figure here stays yours. Sealinn does not rate the insurer on the certificate. The carrier name is read as plain text and compared against nothing, and the NAIC number is not a field Sealinn reads at all — it arrives only when a certificate labels it clearly enough to come through as an extra. Every limit you set is enforced the same way — a figure below your minimum and a section missing from the certificate entirely both block, which what Sealinn checks sets out field by field. Nothing in Sealinn reads your subcontract either, so the flow-down clause, the indemnity and the exhibit itself are documents Sealinn never sees.