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Construction Insurance Requirements Guide

Document Type: Reference Guide
Version: 1.0
Last Updated: February 2026
Distribute To: Project Managers, Estimating, Subcontractor Mgmt

Purpose​

Provide guidance on construction insurance requirements, types, and verification procedures.

Types of Construction Insurance​

1. Commercial General Liability (CGL)​

What It Covers:

  • Bodily injury to third parties
  • Property damage to third parties
  • Personal injury (libel, slander)
  • Products/completed operations

Typical Limits:

  • $1,000,000 per occurrence
  • $2,000,000 general aggregate
  • $2,000,000 products/completed ops aggregate

Key Exclusions:

  • Your own property
  • Employee injuries (WC covers)
  • Professional errors (E&O covers)
  • Auto accidents (auto covers)

2. Workers' Compensation​

What It Covers:

  • Employee work injuries
  • Medical expenses
  • Lost wages
  • Disability benefits
  • Death benefits

Requirements:

  • Mandatory in most states
  • Covers all employees
  • No-fault coverage

Key Points:

  • Experience Modification Rate (EMR)
  • Classifications by trade
  • Audit at policy end

3. Commercial Auto​

What It Covers:

  • Liability for vehicle accidents
  • Physical damage to vehicles
  • Hired/non-owned auto

Typical Limits:

  • $1,000,000 combined single limit

4. Umbrella/Excess Liability​

What It Covers:

  • Additional limits above primary policies
  • Broader coverage in some cases

Typical Limits:

  • $5,000,000 - $25,000,000+

5. Builder's Risk​

What It Covers:

  • Damage to work in progress
  • Materials on site
  • Materials in transit

Key Points:

  • Usually owner-provided
  • Or contractor-provided (check contract)
  • Covers named perils or all-risk

6. Professional Liability (E&O)​

What It Covers:

  • Design errors (design-build)
  • Professional services errors

Who Needs:

  • Design-build contractors
  • Construction managers

7. Contractor's Pollution Liability​

What It Covers:

  • Pollution incidents
  • Cleanup costs
  • Third-party claims

When Needed:

  • Hazmat work
  • Environmental work
  • Owner requirement

Certificate of Insurance (COI)​

What to Look For:​

================================================================
CERTIFICATE OF LIABILITY INSURANCE
================================================================

1. NAMED INSURED
   - Verify correct company name
   - Check address

2. COVERAGES & LIMITS
   - CGL: $1M/$2M minimum
   - Auto: $1M minimum  
   - WC: Statutory
   - Umbrella: Per contract

3. ADDITIONAL INSURED
   - Your company listed
   - Project name (if required)
   - Primary & non-contributory

4. CERTIFICATE HOLDER
   - Your company name
   - Correct address

5. CANCELLATION
   - 30-day notice required
   - Your company receives notice

6. POLICY DATES
   - Current (not expired)
   - Covers project duration

================================================================

Red Flags:​

  • Expired policies
  • Limits below contract requirements
  • Missing additional insured
  • Wrong company name
  • "If required by written contract" without contract

Insurance Verification Checklist​

================================================================
      INSURANCE VERIFICATION CHECKLIST
================================================================

Subcontractor: ____________________________________________

Project: __________________________________________________

Date Received: ____________________________________________

================================================================

GENERAL LIABILITY:
☐ Current policy dates
☐ Per occurrence limit meets requirement: $_________________
☐ General aggregate meets requirement: $_________________
☐ Products/completed ops: $_________________
☐ Your company as Additional Insured
☐ Primary & non-contributory

WORKERS' COMPENSATION:
☐ Current policy dates
☐ Statutory limits
☐ Employer's liability: $_________________
☐ Waiver of subrogation (if required)
☐ EMR acceptable: _________

COMMERCIAL AUTO:
☐ Current policy dates
☐ Combined single limit: $_________________
☐ Additional insured (if required)

UMBRELLA:
☐ Current policy dates
☐ Limit: $_________________
☐ Follows form over CGL, Auto, Employers

OTHER:
☐ Builder's Risk (if contractor-provided)
☐ Professional Liability (if required)
☐ Pollution (if required)

30-DAY CANCELLATION NOTICE:
☐ Verified

================================================================

☐ APPROVED         ☐ DEFICIENT (see notes)

Notes: ____________________________________________________

Verified By: _______________________  Date: ________________

================================================================

Common Contract Insurance Requirements​

CoverageGC RequirementSub Requirement
CGL$1M/$2M$1M/$2M
WCStatutoryStatutory
Auto$1M$1M
Umbrella$5M-$10M$2M-$5M
Builder's RiskPer contractUsually GC/Owner

Requirements vary by project and owner

Additional Insured Endorsements​

Why Required:​

  • Protects you from sub's negligence
  • Defense costs covered
  • Primary coverage (not your policy first)

Types:​

  • CG 20 10 (Ongoing operations)
  • CG 20 37 (Completed operations)
  • Or equivalent "broad form"

What to Request:​

"[Your Company] and [Owner] as additional insured on a primary and non-contributory basis for both ongoing and completed operations"

Wrap-Up Insurance (OCIP/CCIP)​

Owner Controlled (OCIP):​

  • Owner provides GL, WC, Excess
  • Contractor excludes from bid
  • Enrollment required
  • Single policy for project

Contractor Controlled (CCIP):​

  • GC provides for all subs
  • Subs exclude from bid
  • GC administers program

Considerations:​

  • Bid deducts carefully
  • Enrollment procedures
  • Gap coverage
  • Experience mod impact

EMR (Experience Modification Rate)​

What It Is:​

  • Measure of safety performance
  • Based on 3-year loss history
  • 1.0 = industry average
  • Below 1.0 = better than average
  • Above 1.0 = worse than average

Why It Matters:​

  • Many owners require < 1.0
  • Affects WC premium
  • Indicator of safety culture

Typical Requirements:​

  • Private: EMR < 1.0
  • Public: Varies
  • High-risk: EMR < 0.85
  • Subcontractor Prequalification
  • Contract Review Checklist
  • Safety Program
  • Risk Management

Template provided by support.construction. Consult insurance professional for specific needs.

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