Is a sub requiured to list a prime contractor on his general liability policy?

Required by whom?

If the GC's GL insurance company requires it of the GC then it is required in order for the sub to work for the GC, unless the sub wants the GC to deduct the cost of the additional premium the GCs insurance company will charge him for the work completed by that sub while the sub is under the GCs policy. And that is taking for granted the GCs insurance would even allow that at all, now-a-days that's not even an option at all most of the time.

Westcoast_RD said:

Hi there.
Is it required for the sub-contractor to list the prime contarctor as an additional insured on his general liability policy?

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If I worked for a contractor who required me to have liability insurance I had to have them listed on my policy.
That's so they can be notified if a sub drops their insurance.

Sorry I wasnt clear...
We got hired to do a job as a sub and found out the GC does not have liability insurance (or workmans comp for that matter). He is saying we have to have general liability insurance and add his name to the policy for this job.
Just trying to determine wether a general should have his own general liability insurance or if its acceptable that a GC would use the sub's liability insurance.
Hope that makes sense.

That doesn't make sense to me. If he was working on the roof and fell off then your WC would be liable?
I always had to list my trades on my WC policy. It didn't cover things like roofing, electric, plumbing etc because I didn't do that kind of work. If I did my rates would have gone up considerably.
I don't see how you could go in as a sub contractor for one specific trade and cover him while he did other trades?
Since a contractor is responsible for the overall scope of the job you'd be asked to cover everything he did?
Just doesn't make sense. Maybe others have been there and done that. I'd like to hear how.

Westcoast_RD said:

Sorry I wasnt clear...
We got hired to do a job as a sub and found out the GC does not have liability insurance (or workmans comp for that matter). He is saying we have to have general liability insurance and add his name to the policy for this job.
Just trying to determine wether a general should have his own general liability insurance or if its acceptable that a GC would use the sub's liability insurance.
Hope that makes sense.

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The subcontractor needs to have GL and WC, the GC is not being unreasonable expecting him to be named as additional insured, it is standard business practice.

The GC should have GL and WC but it isn't reall any of the subs business whether he has it or not.

Westcoast_RD said:

Sorry I wasnt clear...
We got hired to do a job as a sub and found out the GC does not have liability insurance (or workmans comp for that matter). He is saying we have to have general liability insurance and add his name to the policy for this job.
Just trying to determine wether a general should have his own general liability insurance or if its acceptable that a GC would use the sub's liability insurance.
Hope that makes sense.

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Something fishy. Your GC can't legally work without a GL policy.

Having subs list you as an additionally insured is often required by your GL policy. It's not a means to primary insurance.

My husband is a plastering contractor.
He has workmans comp and is bonded. *all that is required in California.
He was hired by a general contractor to do a job.
The general is asking my husband to provide liability insurance.
I checked the contractor board and he himself has no workmans comp or liability. He is only bonded.
My basic question is this...
Im not passing judgement on the guy for not having WC or LI, im just trying to find out if
1. legally he is supposed to have LI as a general
2. if its normal/acceptable for him to ask US, as the subs, to provide LI for the job.
3. Is it normal/acceptable for GC's to use sub's insurance instead of having their own?

Reason being is that most jobs do not require us to have LI. To get a policy, its VERY expensive and we would have to deduct that amount out of the profit of the job.
I KNOW its best to have it but these are hard times, its costly, and its normally not required.

Westcoast_RD said:

Sorry I wasnt clear...
We got hired to do a job as a sub and found out the GC does not have liability insurance (or workmans comp for that matter). He is saying we have to have general liability insurance and add his name to the policy for this job.
Just trying to determine wether a general should have his own general liability insurance or if its acceptable that a GC would use the sub's liability insurance.
Hope that makes sense.

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If that's the case I'd tell him to go suck it. Why would you provide him additionally insured for the benefit of his GL insurance company if he doesn't have an insurance company? :blink:

Tell him, here is my proof of insurance... when your GL insurance company requests for me to have yourself listed on my insurance you let me know, till then there isn't really anything to talk about.

Now you are in Kalifornia, so all bets are off how accurate this would be for you out there. For all we know California makes the subs provide insurance for the GCs. :laughing:

Mike Finley said:

If that's the case I'd tell him to go suck it. Why would you provide him additionally insured for the benefit of his GL insurance company if he doesn't have an insurance company? :blink:

Tell him, here is my proof of insurance... when your GL insurance company requests for me to have yourself listed on my insurance you let me know, till then there isn't really anything to talk about.

Now you are in Kalifornia, so all bets are off how accurate this would be for you out there. For all we know California makes the subs provide insurance for the GCs. :laughing:

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Naming the GC and the building owner as an additional insured is not anything out of the ordinary.

The sub having his own GL is standard practice, it is a requirement, it will not cover the GC for any work other than what the sub has performed.

If I had a sub asking me about my GL insurance I would explain to him it is none of his business, because it isn't, if a sub wants to work for a GC, they will provide the insurance documents they ask for.

These kind of debates and misunderstandings is what happens when handymen type and unlicensed contractors try to play contractor, because it is clear by the answers here who knows what they are doing and who does not.

JumboJack said:

In Cali. GL is not a requirement.

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Wow. I didn't realize that- I assumed (especially from talking to so many CA contractors complaining about the "mass of regulations" and high cost of business) that they would require insurance. It is required in Oregon...

In that case, I don't know that I would list the GC as an additionally insured. It means you will be covering that person for anything that happens.

I wouldn't work for a GC who didn't have insurance, especially one who was requiring me to have it. Size of job doesn't matter- lawsuits go for deepest pockets first, and if you're the one with the insurance, the cost of any litigation is going to wind up coming out of your pocket and your insurance company's pocket.

I would assume that GC either doesn't have much capital, or is hiding it, making it that much more likely that some problem anywhere on the project might wind up costing you.

bwalley said:

Naming the GC and the building owner as an additional insured is not anything out of the ordinary.

The sub having his own GL is standard practice, it is a requirement, it will not cover the GC for any work other than what the sub has performed.

If I had a sub asking me about my GL insurance I would explain to him it is none of his business, because it isn't, if a sub wants to work for a GC, they will provide the insurance documents they ask for.

These kind of debates and misunderstandings is what happens when handymen type and unlicensed contractors try to play contractor, because it is clear by the answers here who knows what they are doing and who does not.

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I don't agree at all. If I'm acting as a sub to you, I will make sure you've got insurance first. It does matter to the sub because too many of the trades overlap in liability. Your through-wall penetrations run through insulation, framing and siding. If you cut through a joist and the penetration isn't flashed properly you get water damage and structural damage. You may only have caused the structural defect, the siding contractor caused the water damage, but it's going to be you, the framer, the sider and probably the painter & insulator in court. If you don't have insurance and don't have a lot of liquid capital, the HOs insurance is going to try to collect from the subs even if they're only peripherally involved. If they have touched it, they can wind up paying some or all of the cost. I'd want to make sure you paid for what you messed up, not me just because one of my guys didn't flash your penetrations properly.

Your insurance is relevant information for anyone working as a subcontractor to you. If you're underinsured, then they are carrying your business, and should be charging extra to cover their additional exposure.

I just looked at the California Contractors Board website.

Hard to believe but general liability insurance is not required for a contractor general or sub, but is highly recommended. The only requirements financially are a bond and WC insurance if you have employees. Just amazing knowing how much Califomia likes to regulate things. But a contractor is required by law to disclose if they have GL insurance or not.

In Washington and Oregon you are required to have GL insurance besides a bond and WC insurance, as is the case in most other states. And if your insurance lapses so does your license until you get insurance.

To the originally poster, I would say I don't have GL insurance either. But you would be breaking the law if you said that. In reality I would do any work for a contractor that does not have insurance. What happens if you or your employees gets hurt by something caused by their negligence? Sure you have insurance, but I would rather have the general pay instead of taking a claim on my policy.

Kgmz said:

I just looked at the California Contractors Board website.

Hard to believe but general liability insurance is not required for a contractor general or sub, but is highly recommended. The only requirements financially are a bond and WC insurance if you have employees. Just amazing knowing how much Califomia likes to regulate things. But a contractor is required by law to disclose if they have GL insurance or not.

In Washington and Oregon you are required to have GL insurance besides a bond and WC insurance, as is the case in most other states. And if your insurance lapses so does your license until you get insurance.

To the originally poster, I would say I don't have GL insurance either. But you would be breaking the law if you said that. In reality I would do any work for a contractor that does not have insurance. What happens if you or your employees gets hurt by something caused by their negligence? Sure you have insurance, but I would rather have the general pay instead of taking a claim on my policy.

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That is what Workers Compensation is for.

If you guy's don't want to work for a GC that does not have a GL policy that is fine but it sounds like a lot of the people here don't understand what policy covers what.

The GC should have a GL policy of his own, but the subs need their own as well.

bwalley said:

That is what Workers Compensation is for.

If you guy's don't want to work for a GC that does not have a GL policy that is fine but it sounds like a lot of the people here don't understand what policy covers what.

The GC should have a GL policy of his own, but the subs need their own as well.

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Jeez, The general does any insurance at all, GL or WC. He should at least have GL since he must not have employees to have WC and subs everything out.






General Liability Insurance for Contractors

Although contractors can bid for work despite not having general liability insurance, it is not advisable to work without the same. In many cases, the contractor may not be permitted to undertake construction work without adequate insurance. This is because general liability insurance covers third party claims that a contractor is likely to face during the course of operations. It helps to protect the contractor from accidents, contractual liability, and law suits that may result from contracted work. Insurance can help contractors save money on attorneys, who may be employed during the course of litigation, since the insurance company has its own lawyers who are eager to win the case or work out a feasible alternative. Hence, a general contractor needs to be equipped with general contractor liability insurance that provides protection against claims with regard to property damage, personal injury or negligence.

General liability insurance covers bodily injury and property damage that is likely to occur during the course of work. There are exclusions that bar coverage for damages that may arise on account of faulty workmanship, provided the damage occurs prior to the completion of the construction project. General liability insurance also provides coverage for claims arising on account of property damage and bodily injury after the completion of the project. Again, there have been significant disputes regarding whether the policy protects a general contractor against claims for property damage as a result of defective work delivered by the subcontractor, after the completion of the project. The Owners and Contractors Protective (OCP), which provides coverage relating to subcontractors, is included as a part of the general liability policy. Typically, a general contractor is not responsible for the subcontractor's mistakes. However, attorneys for subcontractors have found loopholes that allow them to sue the general contractor for negligence. Hence, before hiring subcontractors, the general contractor needs to ensure that the former has general liability insurance. General contractors, whose subcontractors have general liability coverage, will be required to pay a lower premium on their insurance policy. General liability insurance also provides coverage for claims on account of personal and advertising injury.

The cost of contractors general liability insurance varies depending upon the level of risk, the nature of work, the payroll expenses, the gross receipts of the company and the amount of coverage required. The contractor is required to make a down payment for a general contractor liability insurance, and follow it up with 9 or 10 consecutive monthly payments. Insurance companies have ratings that help customers assess the financial strength of the companies. This is important since a number of companies have ceased to operate due to inadequate financial strength, competitive forces, or changing market place dynamics.

The GC should have GL insurance. He may be getting policies by the job to keep overhead down. This is done on occasion and most of the large insurance companies will do this and some will only issue policies that way to large contracting firms to limit their risk. It is standard to require your subs to list you as additional insured to thier policy for the duration of the job. It is also standard to be required to produce a certificate of WC. The GC would be required here by law to supply WC on any job that has 3 or more people total working on the job who are not covered by a WC policy. Thats a substantial added cost for the GC to assume for another company. The best course of action is to take the insurance requirements to your agent and go over it with your insurance agent. Then the appropriate paperwork and policies (if additional or additional amounts are required) can be put in place and produced.