Does Construction Insurance Cover Subcontractors?

When managing a construction project in Arizona, one of the most important questions for contractors is whether their construction insurance covers subcontractors. Understanding this aspect of your policy is crucial for protecting your business, managing risk, and ensuring compliance with state regulations.

How Construction Insurance Applies to Subcontractors

Construction insurance, particularly general liability coverage, is designed to protect your business from third-party claims of property damage or bodily injury. However, coverage for subcontractors is not always automatic. In many cases, your policy may only extend to subcontractors if certain requirements are met.

Some key points to consider include:

• Named insureds—Most policies cover only those listed as named insureds. Subcontractors are typically not included unless specifically added.
• Additional insured endorsements—You may be able to add subcontractors as additional insureds, which can extend some protections to them while they work on your project.
• Contractual requirements—Many insurance carriers require that subcontractors carry their own insurance and provide proof of coverage before starting work.

Why Proper Subcontractor Coverage Matters

If a subcontractor causes damage or injury on your job site and is not properly insured, your business could be held financially responsible. This can lead to increased claims on your policy, higher premiums, or even denied claims if policy conditions are not met.

To help manage these risks, consider the following tips:

• Verify certificates of insurance. Always request and review certificates of insurance from every subcontractor.
• Set minimum coverage standards. Specify the types and limits of insurance required in your subcontractor agreements.
• Regularly review policies. Ensure your own construction insurance is up to date and includes any necessary endorsements for subcontractor work.

Arizona-Specific Considerations

Arizona contractors should be aware that state regulations and project owners may have specific insurance requirements for subcontractors. Failing to comply can result in project delays or legal complications. Working with an experienced insurance agency can help you navigate these requirements and avoid costly gaps in coverage.

Contact Us

At Sonoran Insurance LLC in Phoenix, AZ, we help contractors and construction businesses understand their insurance policies and implement effective risk management strategies. If you have questions about subcontractor coverage or want to review your current policy, our team is here to assist.

Contact us today for a personalized quote or more information.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.