Subcontractor vs. General Contractor: Insurance Differences in Florida

A general contractor (GC) holds the prime contract with the project owner and is responsible for the entire project. Subcontractors are hired by the GC to perform specific scopes of work — electrical, plumbing, roofing, framing, etc. This hierarchy creates a chain of insurance responsibility that flows from the project owner down through the GC to each sub.

The GC is ultimately responsible to the owner for the project. This means the GC bears the risk if a sub causes damage, gets injured, or fails to perform. Insurance is how that risk is managed.

Florida GCs need a comprehensive insurance program:

• General Liability: Minimum $300K per occurrence (CILB requirement); $1M+ for commercial work
• Workers' Compensation: Required for all employees; verify subs have their own
• Commercial Auto: Required for business-use vehicles
• Builders Risk: Required by most lenders and project owners
• Umbrella/Excess Liability: Recommended for projects over $500K

GCs also need to manage the insurance of their subs — collecting COIs, verifying coverage, and requiring additional insured status on sub policies.

Subcontractors have their own insurance requirements, both from Florida law and from the GCs who hire them:

• General Liability: Most GCs require $1M per occurrence minimum; some require $2M
• Workers' Compensation: Required if the sub has employees; sole proprietors can file for exemption
• Commercial Auto: Required for business-use vehicles
• Additional Insured Endorsement: GCs typically require subs to name the GC as an additional insured on their GL policy

The COI chain is how insurance is documented and verified across the GC/sub relationship:

1. The project owner requires a COI from the GC showing required coverages and naming the owner as additional insured
2. The GC requires COIs from all subs showing required coverages and naming the GC as additional insured
3. The GC files sub COIs and verifies them before work starts
4. At audit, the GC presents sub COIs to demonstrate that sub wages should not be added to the GC's payroll

Use the Bright Coast Policy Verification tool to verify any Florida policy is active before work starts.

If a subcontractor causes property damage or bodily injury on a job, the primary question is: whose insurance responds? The answer depends on the facts:

• If the sub has their own GL and the GC is named as additional insured, the sub's policy responds first
• If the sub has no GL or insufficient limits, the GC's GL may respond (with potential subrogation rights against the sub)
• If the damage is to the GC's own work, neither GL policy may cover it — that's a builders risk issue

This is why requiring additional insured status on sub policies is so important. It gives the GC direct access to the sub's coverage.