Here's the uncomfortable truth about hiring subcontractors as a handyman: if they get hurt on your job and don't have their own insurance, you're paying for it. Not just the immediate medical bills—we're talking ongoing treatment, lost wages, maybe even a lawsuit. One uninsured sub with a ladder fall can wipe out years of profit.
The good news? Protecting yourself isn't complicated—it just requires knowing what to ask for and actually verifying you got it. Most handymen who run into trouble didn't intentionally skip insurance requirements. They just assumed a quick text saying "yeah, I'm covered" was good enough. It's not.
Why Subcontractor Insurance Requirements Matter
When you hire someone to help with a job, the law often considers you the prime contractor. That means if your subcontractor doesn't carry workers' compensation insurance and gets injured, the workers' comp claim flows upward to you—and in many states, ultimately to the property owner. Your insurance company will pay the claim, then your premiums skyrocket. Or worse, you pay out of pocket if you don't have coverage.
The same principle applies to general liability. If your subcontractor accidentally damages customer property or causes an injury to a third party, and they don't have adequate liability insurance, guess who the customer sues? You. Even if you had nothing to do with the actual damage, you hired them, so you're on the hook.
Insurance requirements aren't bureaucratic red tape. They're the only thing standing between you and financial disaster when something goes wrong. And on job sites with power tools, ladders, and tight deadlines, things go wrong regularly.
What Coverage Your Subcontractors Need to Carry
The two non-negotiable policies your subcontractors must have are general liability insurance and workers' compensation insurance. As of 2025-2026, the coverage limits you should require have increased significantly from previous years.
For general liability, the old standard was $1 million per occurrence and $2 million aggregate. That's no longer adequate for most work. You should require at minimum $2 million per occurrence and $4 million aggregate. If the subcontractor is doing specialized trade work like electrical, plumbing, or roofing, some jobs now require $5 million aggregate coverage.
Workers' compensation requirements vary by state, but the principle is universal: your subcontractor must carry workers' comp if they have employees. Even if they claim to work alone, verify it. Some states require sole proprietors to carry coverage on themselves, and even when they don't, it's often wise to require it contractually to eliminate any gray area about who's responsible if they get hurt.
Commercial auto insurance should also be required if the subcontractor uses a vehicle for work purposes. This protects you if they cause an accident while driving to pick up materials or traveling between job sites on your project.
Understanding Certificates of Insurance and What They Actually Mean
This is where most handymen make their biggest mistake: they think a certificate of insurance provides protection. It doesn't. A certificate is simply a document showing that a policy exists. It's proof of insurance, not insurance itself.
When you receive a certificate, check these critical details: First, verify the effective dates cover the entire period your subcontractor will be working. A policy that expires mid-job leaves you exposed. Second, confirm the named insured matches exactly who you're paying. If the certificate shows "ABC Contractors LLC" but you're writing checks to "Bob Smith," that's a red flag—coverage may not apply. Third, make sure the coverage types and limits match what you required in your contract.
But here's the critical part: being listed as a "certificate holder" means nothing. Certificate holder is just the person who asked to see the certificate. It provides zero coverage. What you actually need is to be listed as an "additional insured" through a specific endorsement on their policy.
Additional Insured Endorsements: The Protection You Actually Need
An additional insured endorsement adds you to your subcontractor's general liability policy, which means their insurance covers you for claims arising from their work. This is essential protection because it means their insurance pays first if there's a claim related to their work—not yours.
Not all additional insured endorsements are created equal. You need to understand the specific ISO forms. The most common are CG 20 10 and CG 20 37. CG 20 10 covers "ongoing operations"—meaning it only protects you while the subcontractor is actively working. The problem? Many claims happen after the work is done. Someone slips on a newly installed floor, or a deck collapses six months later. That's where CG 20 37 comes in—it covers "completed operations."
You need both. If your subcontractor's certificate only shows CG 20 10, you have a coverage gap. In 2026, many contractors are instead requiring newer forms like CG 20 26, CG 20 38, or CG 20 43 combined with CG 20 40 for completed operations, as these provide broader coverage.
Also critical: the endorsement should specify that coverage is "primary and non-contributory." This means the subcontractor's insurance pays before yours gets involved. Without this language, both insurance companies might argue about who pays first, delaying your claim and potentially leaving you to cover costs upfront.
Waiver of Subrogation: Preventing Insurance Company Battles
A waiver of subrogation is an endorsement that prevents your subcontractor's insurance company from coming after you for reimbursement after they've paid a claim. Here's how it works: your subcontractor causes property damage, their insurance pays the claim, then their insurance company decides you were partially at fault and sues you to recover the money. A waiver of subrogation stops this.
There are two types of waivers. A scheduled waiver lists specific parties by name—you would be named specifically. A blanket waiver is broader; it says the insurance company won't pursue anyone the subcontractor has contractually agreed to waive subrogation against. Blanket waivers are generally better because they automatically cover you without requiring the subcontractor to remember to add your name to every job.
Waiver of subrogation should be required on both general liability and workers' compensation policies. This is especially important for workers' comp, because even if your subcontractor has coverage, their carrier might try to recover costs from you if they decide the job site conditions you created contributed to the injury.
How to Verify and Track Subcontractor Insurance
Requesting a certificate of insurance is step one. Actually verifying it's legitimate and current is step two—and that's where many handymen drop the ball. Don't assume the certificate is accurate just because it looks official. Insurance agents make mistakes, and occasionally subcontractors submit outdated or even falsified certificates.
Call the insurance agent listed on the certificate to confirm the policy is active and the coverage details are correct. Ask specifically whether you're listed as an additional insured and whether the policy includes waiver of subrogation. Request copies of the actual endorsements—don't just rely on what the certificate says in the description box.
Keep organized records. Create a file for each subcontractor with their certificate, the actual endorsements, and your written contract that spells out insurance requirements. Match the dates carefully—if their policy expires before your project ends, you need a renewal certificate before they continue working.
Some handymen use certificate tracking software or third-party services that automate verification and send alerts when policies are about to expire. If you regularly work with multiple subcontractors, this can be worth the investment to avoid coverage gaps.
What to Do When a Subcontractor Doesn't Have Adequate Insurance
You'll inevitably encounter great subcontractors who don't carry insurance, or who carry coverage below your requirements. It's tempting to make exceptions, especially if you've worked with them before without problems. Don't.
Your options are limited: they can obtain the required coverage, you can find a different subcontractor, or you can hire them as a direct employee (which means you provide workers' comp and they're covered under your liability policy). The employee option is expensive and comes with payroll tax obligations, but it's sometimes the right choice for people you use regularly.
What you absolutely cannot do is hire them as an uninsured independent contractor and hope nothing goes wrong. Even if you have them sign a waiver saying they're responsible for their own injuries, many states won't enforce those waivers. When someone gets seriously hurt, they file a workers' comp claim, and your insurance—or you personally—ends up paying.
Building Insurance Requirements Into Your Contracts
Every subcontractor agreement you sign should include a detailed insurance section specifying exactly what coverage is required. Don't rely on verbal agreements or assume standard industry practices will protect you. Spell it out in writing.
Your contract should specify minimum coverage limits for general liability and workers' compensation, require that you be named as additional insured with primary and non-contributory coverage, require waiver of subrogation on all policies, specify the minimum AM Best rating for the insurance carrier (typically A- or better), and require 30-day advance notice if any policy is cancelled or materially changed.
Also include language that makes providing proof of insurance a condition of starting work and getting paid. No certificate, no work. No current certificate, no payment. This gives you leverage to actually enforce the requirements instead of chasing paperwork after someone's already on the job.
Protecting Your Business Starts With Proper Documentation
Managing subcontractor insurance requirements feels like extra work when you're trying to focus on getting jobs done and keeping customers happy. But one uninsured injury or liability claim can cost more than you'll make in a year—or multiple years. The paperwork isn't optional.
Build insurance verification into your standard process. Make it as routine as getting a signed contract or collecting payment. Request certificates before work starts, verify they're legitimate, keep them organized by job and date, and don't let policies lapse mid-project. The investment of time pays for itself the first time you avoid a claim that would have wiped you out.
