General Contractors

Posted on June 7, 2018

Aspera Insurance Services offers difficult-to-insure small businesses Commercial General Liability (CGL) insurance. A CGL insurance policy protects insureds against liability claims for “bodily injury” and “property damage” arising from a variety of risks including premises, operations, and products. Because no two businesses are exactly alike, the policy responds to a wide-range of exposures from commercial construction, contractors, vacant land and buildings, to office buildings, strip malls, apartments, hotels, and motels.

General contractors, subcontractors, and 100% Paper GCs

Nowadays, a typical construction project will have one general contractor and one or more subcontractors. Many general contractors are what insurance professionals call a “100% Paper GC” which means the general contractor strictly acts as a supervisor but does not participate in the construction project. It also means the general contractor is not utilizing any of their business’ employees in the construction project, but has independent contractors or subcontractors for 100% of the project.

Coverage Limitations for Independent Contractors & Subcontractors

Not every insurance policy begins and ends on the same date, and because of this, it can be difficult for General Contractors to not only keep track of their subcontractors’ insurance policy renewals, but it can also be difficult to ensure the subcontractor has paid their premiums and haven’t been canceled for non-payment. For this reason, many insurance policies have limitations built into the coverage for these types of subcontractor exposures.

Limitations may include:

  • Independent contractor or subcontractor must maintain insurance coverage with limits of equal to or greater than the insurance coverage and limits of insurance provided by this policy; and
  • Provides you (the General Contractor) with an endorsement or certificate of insurance indicating you have been added to the independent contractor’s or subcontractor’s policy as an Additional Insured; and
  • The independent contractor or subcontractor provides you with an endorsement or certificate indicating that the independent contractor’s or subcontractor’s insurance company has agreed to provide a Waiver of Subrogation endorsement in your favor; and
  • Contracts with the independent contractor or subcontractor contain hold harmless and indemnity agreements in your favor, indemnifying you against any losses or expenses arising from or related to work performed for you or on your behalf by such independent contractor or subcontractor.