Most construction contracts ask for the same four policies: general liability, workers comp, commercial auto, and an umbrella. The exact limits, and the extra wording your customer wants added, are in the insurance section of your contract. That is usually a page or two titled "Insurance Requirements," or an exhibit near the back. Who this is for: contractors and trades about to sign a contract with a general contractor, property owner, or public agency.
The short version
- Find the insurance section first. It lists every policy and limit.
- Four policies cover most contracts: general liability, workers comp, commercial auto, and an umbrella on top.
- The extra wording matters more than the limits. Most certificates fail because the customer was not added to your policy the way the contract asked.
- If your policy falls short you can add a page to it, raise a limit, buy a second layer on top, or ask the customer to adjust.
Where in my contract are the insurance requirements?
Look for a section titled "Insurance," "Insurance Requirements," or "Indemnification and Insurance." In a standard American Institute of Architects (AIA) contract it is Article 11. In a subcontract it is usually an exhibit near the back.
Read three things there: the policies, the limit for each, and the extra wording your customer wants added. The third part trips up most contractors.
What policies do most construction contracts ask for?
| Policy | What it does in plain English | Limit most contracts ask for |
|---|---|---|
| General liability | Pays if your work injures someone or damages property that is not yours, including damage found after the job | $1,000,000 per occurrence and $2,000,000 aggregate (the total for the year) |
| Workers comp | Pays medical bills and lost wages when an employee is hurt on the job | Whatever your state requires (Texas does not require most private employers to carry it, but contracts still do), plus employers liability. That shows as three numbers: each accident, disease policy limit, disease each employee. Contracts usually want the amount on all three. |
| Commercial auto | Covers trucks and vans the business uses, plus vehicles you rent or employees drive for work | $1,000,000 combined single limit |
| Umbrella or excess liability | A second layer of coverage above your liability, auto, and workers comp policies | $1,000,000 to $5,000,000, depending on the project |
| Contractors pollution liability | Pays for cleanup and claims caused by fumes, dust, spills, or mold from your work | Only on some contracts, usually $1,000,000 |
What do the extra words in the insurance section mean?
Each line below asks your insurer to treat your customer in a certain way. Each is a change added to your policy, called an endorsement.
| What the contract says | What it means | What you need |
|---|---|---|
| Additional insured | Your customer can use your general liability policy if they are sued because of your work | An endorsement. Some insurers add blanket wording that covers the party you signed a written contract with, when the contract was signed before the loss. Not every policy has it, and it usually does not reach an owner, lender, or architect you did not sign with, so those names may need their own endorsement. |
| Additional insured for completed operations | That protection keeps going after the job is finished, when most construction claims show up | A second endorsement. It is often missing, and it is the page general contractors check for. |
| Primary and noncontributory | Your policy pays first and your customer's policy does not have to chip in | Usually its own endorsement (form CG 20 01). Some insurers build the wording into their blanket additional insured form instead, so check the form list either way. |
| Notice of cancellation | Your customer wants to be told before your policy stops | Most contracts ask for 30 days. Your insurer usually will not promise it, and the certificate only says notice follows the policy terms. Some sell an endorsement listing parties to notify. In practice your broker sends it, so tell them who to tell. |
| Waiver of subrogation | Your insurer agrees not to go after your customer to recover money it paid on a claim | One endorsement on general liability and a separate one on workers comp. |
Deeper reading: adding your customer to your policy and which documents your customer wants before you start.
What if my current policy does not match the contract?
This happens on most first contracts. You have four ways to close the gap:
- Add an endorsement. The wording above is routine and usually issued in one to three business days. Ask which form you have and who it covers.
- Raise a limit. Going from $1,000,000 to $2,000,000 on general liability is often possible mid term, though some insurers will not for certain trades.
- Buy an umbrella. Most contracts let you add your policy and an umbrella together to reach the number. Some require the full limit on the general liability policy itself, so read the wording. An umbrella cannot supply a yearly limit that resets per job. Placing one usually takes a day to two weeks.
- Ask the customer to adjust. Some requirements are copied from a template written for a much larger company, and customers change them more often than you think.
None of this is usually big money. Illustrative for a small contractor with clean claims: extra wording is often free or under a few hundred dollars, and a $1,000,000 umbrella often runs roughly $600 to $2,500 a year. Trade, payroll, state, and claims history move those numbers. See what this costs.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A drywall subcontractor in New Jersey signs a $340,000 subcontract on a four story apartment building. Exhibit D asks for $1,000,000 per occurrence and $2,000,000 aggregate general liability, a $5,000,000 umbrella, the general contractor and owner added to his policy during and after the job, and waivers of subrogation.
What went wrong: His limits match, but his policy has no after completion wording and his umbrella is only $1,000,000. The certificate is rejected the Friday before a Monday start.
What it cost: The crew sat for eight working days while a new umbrella was placed and the wording added. Illustrative cost: roughly $11,000 in idle labor.
The fix: Send the insurance exhibit to your broker before you sign. Every fix here was available in advance, for a fraction of the cost of the delay.
Frequently asked questions
Q: What insurance do I need for a construction contract?
Most contracts ask for general liability, workers comp, commercial auto, and an umbrella. Some add pollution coverage. The exact list is in the insurance section of your contract.
Q: How much general liability does a construction contract usually require?
The most common requirement is $1,000,000 for any one incident and $2,000,000 for the policy year. Larger and public projects often ask for $2,000,000 per incident.
Q: Do I need to buy the insurance before I sign the contract?
Usually no. You need it in place, with proof delivered, before you start work. Get the insurance section reviewed before you sign, so you know the cost.
Q: What does it mean to add my customer to my policy?
It means your customer wants to use your general liability policy if they are sued because of your work. An endorsement adds them, and most contracts want it to last after the job.
Q: Is a certificate of insurance enough to show I meet the contract?
Often not on its own. Most general contractors also want the policy pages the certificate refers to, because a certificate is a summary and grants nothing by itself.
Q: Who can review my contract's insurance requirements for free?
An independent broker will usually do it at no charge, because it is how they find out what coverage to place. Ask for the answer in writing, line by line.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Reading the insurance section of a contract and matching it to a policy is the most common thing our contractor clients ask us to do.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.