Every GC has had this conversation: a sub says “I’ve got insurance,” and that phrase could mean nine different things. Here’s what’s actually being asked for.
General liability pays when your work injures someone else or damages their property, including finished work that fails later. It does not cover your own crew’s injuries or your own defective work. Nobody’s legally required to carry it, but GCs and project owners will demand proof before you’re allowed on site.
Workers’ compensation covers medical treatment and part of lost wages when an employee is hurt on the job. This one’s state law, and the trigger point, how many employees before it’s mandatory, varies a lot by state, so check your state’s rule specifically.
Commercial auto covers the work truck and trailer. A personal auto policy will likely deny a claim on a vehicle used mainly for business, which surprises people every year.
Tools and equipment coverage (inland marine) protects your movable stuff, tools, equipment, materials, whether it’s in transit, on the job site, or stored off-site. If your tools ride in a trailer that could get broken into tonight, this is the policy that pays.
Builder’s risk covers the structure and materials themselves while a project is under construction, before it’s finished and occupied. It’s arranged per project, and the contract usually spells out who’s responsible for buying it. Read the contract; don’t assume the owner has it covered.
Umbrella (excess liability) stacks extra limits on top of your general liability and auto policies once those max out. It’s for the one catastrophic claim. Optional, but some larger GCs set contract minimums you can only hit with an umbrella layer.
Bonds aren’t insurance for you, they’re a guarantee to someone else. License bonds satisfy a state or city licensing requirement. Contract bonds back your performance on a specific job: bid bonds, performance bonds (the job gets finished), payment bonds (subs and suppliers get paid).
Professional liability (errors and omissions) covers financial harm from design or consulting mistakes, the kind of thing general liability excludes. This one matters most for design-build contractors and anyone selling engineering or design judgment.
Certificates of insurance are a one-page summary proving coverage exists on a given date. A COI by itself grants nothing. If a contract requires you to be an “additional insured,” that only exists if the policy carries an actual endorsement naming that party, the endorsement is what counts, not the certificate.
Practical takeaway: When a contract asks for proof of coverage, know which of these nine it actually means before you call your agent. And if you’re the one requesting a COI from a sub, ask for the additional-insured endorsement by name if your contract requires it, the certificate alone doesn’t get you there.
Local relevance: NWA’s construction market runs heavy on subcontracted work, remodels, tile, HVAC changeouts, punch-list crews, so misunderstanding “additional insured” or assuming a personal auto policy covers a work truck are mistakes that show up here constantly.
For the full chapter with source chips on every claim, see The NWA Trade Guide’s contractor directory.