What insurance do national homebuilders require from subcontractors?
Almost always general liability at $1,000,000 per occurrence and $2,000,000 aggregate, plus workers compensation, commercial auto and an umbrella. The builder is added as an additional insured for ongoing and completed operations. Expect primary and non-contributory wording, a waiver of subrogation, and completed operations held for years after the homes are finished. The exact limits sit in a private agreement and differ by builder, trade and region.
Tell us the situation.
A licensed human replies the same business day — not an auto-responder, and not five producers calling at once. We shop it across our carriers and tell you if the policy you already have is the right one.
We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.
The detail
General liability limits of $1,000,000 per occurrence and $2,000,000 general aggregate are the common baseline in United States commercial construction contracts.
Construction contracts commonly require completed operations coverage to be maintained for a period after substantial completion, with requirements ranging from two or three years to ten years or the applicable statutory period.
Requiring the general contractor or owner to be named as an additional insured, together with a waiver of subrogation, is standard practice in residential construction.
Umbrella requirements commonly scale with contract value, rising from around $5,000,000 on smaller projects to $10,000,000 and above on larger work and high-hazard trades.
What this means for you
- Read the subcontractor agreement rather than the certificate request. The requirement that fails is usually written in the contract months before anybody asks for paper, and by then the policy is already bound.
- The completed operations tail is the clause contractors miss. A requirement to maintain coverage for several years after the homes are finished is a commitment that outlives the policy, the carrier and sometimes the relationship — and letting it lapse breaches a contract you signed long ago.
- Production housing is where a residential tract exclusion bites hardest. Perfect additional insured paper on a policy that excludes multi-unit and tract work does not cover the job at all.
- Umbrella limits are usually the reason a small sub cannot bid a large builder. It is generally a placement problem rather than a price one, and it is solvable before the bid rather than during it.
- Certificates on production schedules are urgent by nature. A trade that cannot produce compliant paper the same day loses the short-notice work to one that can.
Related questions
- Where do I find a specific builder’s insurance requirements?
- In your subcontractor agreement, in the exhibit usually titled insurance requirements, and nowhere else — national builders do not publish them. Anyone stating a named builder’s limits on a public web page is repeating hearsay, and requirements differ by trade and region within the same builder. Send us the agreement and we will read the exhibit against your policy line by line.
- Why is residential harder to insure than commercial?
- Because a defect repeated across a development produces many claims at once, frequently as a class action or a homeowners association suit, and every one of them carries its own defence cost. Carriers respond by excluding tract, condominium and townhome work outright. The coverage exists, but it is placed with carriers whose appetite includes residential rather than argued out of one whose appetite does not.
- The builder wants a ten-year completed operations tail. Is that normal?
- It is at the long end of the range and it does appear, usually tied to the statute of repose for construction defect in that state. What matters is that it binds you after the job is over: your policy has to keep carrying completed operations for that trade, with no exclusion added in the meantime, across every renewal in that period.
- Can you issue certificates the big builders will accept?
- Yes, and the reason we can is that the endorsements are put on the policy at placement rather than found missing when the certificate is requested. Acceptance is not really about the certificate — it is about whether the policy behind it carries additional insured for completed operations, primary and non-contributory, a waiver of subrogation, a per-project aggregate where required, and no exclusion that removes the work.
Need this handled?
We do the filings, and we place the accounts other brokers decline — lapsed authority, claims history, new ventures. Tell us the situation and a licensed human replies the same business day.