What insurance and bonds should my contractor carry?
A certificate of insurance is a snapshot, not a guarantee. Owners who verify coverage properly rarely find out the hard way.
Require commercial general liability, workers' compensation, auto liability, and builder's risk; be named as additional insured with a waiver of subrogation; and consider a performance and payment bond on any project where a contractor default would be financially serious.
What to require and why
| Coverage | Protects against | Owner action |
|---|---|---|
| General liability | Property damage and injury from the work | Be named additional insured, ongoing and completed operations |
| Workers' compensation | Worker injury claims reaching you | Verify for every subcontractor, not just the GC |
| Builder's risk | Fire, wind, theft during construction | Confirm who buys it and who is named as loss payee |
| Performance bond | Contractor default | Consider when replacement cost would be material |
How to actually verify
- Request the certificate directly from the insurance agent, not the contractor
- Check policy effective dates against your construction schedule, including any extension
- Confirm additional insured status by endorsement, not just a note in the description box
- Re-verify at renewal — coverage lapses mid-project more often than owners expect
Coastal note
Wind and flood are frequently excluded or sub-limited on builder's risk in coastal counties. Read the exclusions before a storm makes the question urgent, and confirm in writing who carries the risk for materials stored on site.
Common questions
- Is a performance bond worth the cost?
- Typically around 1–3% of the contract value. On a project where a contractor default would be financially serious for you, that is inexpensive insurance; on a small job with a long-standing contractor, it is often not warranted.
Start with a conversation.
Tell us where the project stands. We'll respond within one business day — with next steps, or a candid reason it isn't the right fit.
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