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What Insurance Limits Should You Require From Subcontractors?

By SubCover HQ · Updated Oct 27, 2026 · 4 min read

"What limits should I require?" is one of the first questions contractors ask when they start taking COI compliance seriously. There's no single right answer. The right numbers depend on your contracts, your trade mix, your project sizes, and your own insurance program. But there are clear common practices, and knowing them gives you a solid starting point for a conversation with your broker.

Start with what your own contracts require

Before you pick numbers, look up:

• Your contract with the owner, landlord, or client. It often sets required limits that you must pass down to subs.
• Your own insurance policy. Some contractors' policies include conditions requiring subs to carry certain limits and name you as additional insured. Missing them can affect your own coverage or premium at audit.
• Lender or public-agency requirements on financed or public jobs.

Common ranges by coverage type

For small, low-risk vendors (a janitorial service or a landscaper at a small apartment building, say), many property managers accept $1M/$2M general liability with no umbrella. For a roofing sub on a commercial building, $5M or more in umbrella is not unusual.

What pushes requirements up

• Trade risk: roofing, demolition, excavation, structural steel, crane operations, electrical, and work at height usually carry higher requirements.
• Project size and type: larger contract values, commercial or public projects, and residential multi-family (with its long-tail construction defect exposure).
• Who's on site: occupied buildings, tenants, and the public increase third-party exposure.
• Contract flow-down: if your owner requires $5M from you, you'll likely require meaningful limits from your subs.

Tier your requirements instead of one-size-fits-all

Requiring $5M umbrella from a two-person painting crew may mean nobody bids. Requiring only $1M from a roofer may leave you exposed. Many companies use two or three tiers:

• Tier 1 (low risk): consultants, cleaning, light maintenance, deliveries.
• Tier 2 (standard trades): most interior trades, landscaping, painting.
• Tier 3 (high risk): roofing, demolition, excavation, structural, crane.

Your broker can help assign trades to tiers and set numbers for each.

Limits aren't everything

A sub can meet every limit and still leave you exposed. Your requirements should also cover:

• Additional insured status on GL (ongoing and completed operations), and often auto and umbrella. See additional insured vs. certificate holder.
• Waiver of subrogation. See our explainer.
• Primary and noncontributory wording.
• Per-project aggregate on GL, so claims on other jobs don't erode the limit for yours.
• Occurrence-form GL rather than claims-made.
• Insurer rating, often A.M. Best A- VII or better.
• Umbrella follow-form: the umbrella should extend AI status to you too.

Write it down and apply it consistently

Whatever numbers you choose, put them in your subcontract and a requirements sheet, and check every certificate against them. Our free subcontractor COI checklist is a good template, and the COI tracking guide covers how to keep it all current.

We check the limits for you

Once you set your requirements, SubCover HQ compares every certificate against them, flags limits below your minimums and missing endorsements in plain English, and chases the agent for a corrected certificate.

Frequently asked questions

Can a sub use an umbrella to meet my general liability limit?

Often yes. Many contracts allow a combination of primary and umbrella or excess limits to meet a total requirement, for example $1M GL plus a $4M umbrella to meet $5M. The umbrella should follow form and extend additional insured status to you. Spell out in your contract whether combinations are allowed.

What if a good sub can't meet my limits?

You have options: accept lower limits for that job with sign-off from someone accountable, require the sub to buy a project-specific umbrella, or limit the sub to lower-risk work. What you shouldn't do is waive requirements informally and never write it down.

Do residential contractors need the same limits?

Requirements on residential work are often lower, but residential and multi-family work can carry significant completed operations exposure. Talk with your broker about what's typical in your market and project type.

How often should I revisit my limits?

Review them yearly with your broker, and whenever you take on a larger project, a new type of work, or a contract with new insurance requirements. Medical and legal costs rise over time, so limits that made sense ten years ago may be thin today.

Will my insurer check?

Many contractors' insurers audit certificates from subs at policy renewal. Missing or inadequate sub coverage can lead to additional premium or coverage problems, which is another reason to keep clean records.

Key takeaways

Start from your own contracts and policy, use common practice as a reference point, tier requirements by trade risk, and look past the limits to endorsements. Then check every certificate against the written standard, every time.

This article describes common industry practice for general information. It is not insurance, legal, or risk-management advice.