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:
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CERTIFICATE OF LIABILITY INSURANCE
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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
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Red Flags:
- Expired policies
- Limits below contract requirements
- Missing additional insured
- Wrong company name
- "If required by written contract" without contract
Insurance Verification Checklist
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INSURANCE VERIFICATION CHECKLIST
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Subcontractor: ____________________________________________
Project: __________________________________________________
Date Received: ____________________________________________
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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
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☐ APPROVED ☐ DEFICIENT (see notes)
Notes: ____________________________________________________
Verified By: _______________________ Date: ________________
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Common Contract Insurance Requirements
| Coverage | GC Requirement | Sub Requirement |
|---|---|---|
| CGL | $1M/$2M | $1M/$2M |
| WC | Statutory | Statutory |
| Auto | $1M | $1M |
| Umbrella | $5M-$10M | $2M-$5M |
| Builder's Risk | Per contract | Usually 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
Related Documents
- Subcontractor Prequalification
- Contract Review Checklist
- Safety Program
- Risk Management
Template provided by support.construction. Consult insurance professional for specific needs.