Subcontractor Compliance Checklist — Business Insurance Health

Project:

Subcontractor:

Date:

Before Hiring a Sub

Verify business license — Confirm active state/local license for the trade being performed
Verify workers' comp coverage — Confirm class codes match the work being performed (e.g., roofing = 5551)
Verify GL coverage — Minimum $1,000,000 per occurrence / $2,000,000 aggregate
Verify commercial auto — Required if subcontractors drive their own vehicles to job sites
Request additional insured endorsement — Your company must be named as additional insured on the sub's GL policy
Request waiver of subrogation endorsement — Prevents the sub's carrier from coming after you for claims
Verify carrier AM Best rating — A- (Excellent) or better; do not accept sub-standard carriers
Call carrier directly to confirm coverage — Never trust the certificate alone. Use the carrier's publicly listed phone number to verify

Contract Requirements

Written subcontractor agreement required — Never rely on a verbal agreement; always get it in writing
Indemnification clause — Sub holds you harmless for claims arising from their work or negligence
Insurance requirements clause — Specify exact coverage types and minimum limits in the contract
Right to suspend work if coverage lapses — Contract must allow you to stop work immediately if insurance expires
Payment contingent on maintaining coverage — No valid insurance = no payment; put it in writing

Why this matters: If an uninsured or underinsured sub causes a jobsite injury or property damage, YOUR company's policy responds — and your experience mod, premiums, and reputation take the hit. One bad sub can cost you six figures.

Ongoing Monitoring

Calendar renewal dates for every sub — Set reminders for each subcontractor's policy expiration dates
Request updated COIs 30 days before expiration — Don't wait until the last minute; give subs a 30-day notice
Suspend site access immediately if coverage lapses — Zero tolerance; no active policy means no jobsite access
Quarterly audit of all active sub COIs — Review every active subcontractor's certificate at least every 90 days
Document everything in writing — Keep copies of all COIs, endorsements, contracts, and correspondence on file

Notes

Project:

Subcontractor:

Date:

Red Flags — Watch Out For These

▿ Certificate issued by the sub themselves — COIs must come from a licensed agent or directly from the carrier, never from the sub
▿ Phone number on cert doesn't match carrier's public number — Cross-check the number against the carrier's website or AM Best listing
▿ Coverage limits seem unusually low for the trade — Roofing subs should carry at minimum $1M/$2M GL; anything less is a warning sign
▿ Policy effective dates don't cover the project timeline — Confirm coverage spans the full duration of the sub's work on your project
▿ Sub resists providing certificate or endorsements — If they push back, walk away; legitimate contractors expect this request

★

Quick Reference — Minimum Requirements

Coverage Type	Minimum Limit	Key Notes
General Liability	$1M occ / $2M agg	Must include additional insured + waiver of subrogation
Workers' Comp	Statutory Limits	Verify correct class codes for roofing work
Commercial Auto	$1M CSL	Required if sub drives to job sites
Umbrella / Excess	$1M+ recommended	Strongly recommended for high-risk trades like roofing

Remember: A Certificate of Insurance is just a snapshot — it can be cancelled the next day. Always request endorsements (additional insured + waiver of subrogation) directly from the carrier. Endorsements are part of the actual policy and provide real protection.

📋

COI Tracking Log

Sub Name	GL Exp.	WC Exp.	Auto Exp.	AI	WOS	Verified

AI = Additional Insured • WOS = Waiver of Subrogation • Mark each with ✓ when confirmed

Need help reviewing your subcontractor compliance program?

Contact Business Insurance Health for a free risk assessment — businessinsurance.health

Analyst Notes

This tool applies risk management frameworks specific to the roofing and construction industry, where insurance costs represent 8-15% of total project costs and experience modification rates directly impact bid competitiveness. Industry data is drawn from NCCI construction class code experience, OSHA inspection databases, and carrier loss ratio reports for the roofing sector.

The analysis incorporates key risk metrics including EMR trending, OSHA recordable incident rates (DART and TRIR), and subcontractor insurance verification requirements that are increasingly demanded by general contractors and project owners. Regulatory compliance costs are estimated based on current federal OSHA standards and state-plan state requirements where applicable.

Roofing contractors with EMRs below 0.85 and documented safety programs typically qualify for preferred insurance pricing and gain access to larger commercial projects. The ROI of safety and compliance investments shown here is calibrated against industry benchmarks from the National Roofing Contractors Association (NRCA) and the Construction Industry Institute (CII).

Data Sources & Methodology ▼

This analysis draws from the following primary data sources:

Centers for Medicare & Medicaid Services (CMS) — Marketplace plan landscape data and MLR filings
Internal Revenue Service — ACA penalty adjustment notices and Section 125 guidance
Bureau of Labor Statistics — employer compensation cost surveys
Kaiser Family Foundation — Employer Health Benefits Survey

Methodology note: All projections use a composite rate approach with demographic adjustment factors. State-specific regulatory constraints are reflected in baseline rate assumptions. Results are directional estimates intended for planning purposes.

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