How to read a GC's insurance requirements without a lawyer

The honest answer is that a GC’s insurance exhibit is nine clauses long, and you can read all nine yourself in twenty minutes if somebody tells you what each one is asking for. Nobody usually does. The exhibit shows up as an attachment to a subcontract for a site in Denver, it’s four pages of insurance language, and the project manager wants it signed by Friday. Here’s each clause, what it means for an outfit running a John Deere 772GP and a couple of Bell trucks, and what to ask before you sign. We insure excavation contractors across the state, and this is the document we ask for before anything else.

Read it in this order

Most exhibits follow the same shape, whether they come from a Front Range custom home builder or a national GC on an I-70 job. Limits first, then the endorsements that change who the policy protects, then the other lines, then the paperwork rules. Take them one at a time.

1. Limits

The clause reads something like “Commercial General Liability of not less than $1,000,000 each occurrence and $2,000,000 general aggregate.” That’s the contract norm for most private work in Colorado and it’s where most contractor policies are written. Some exhibits ask for more, and some add “per project aggregate,” which means the $2M refreshes for each job instead of being shared across your whole year.

Check three things. Do your limits match or exceed every number in the clause. Is there a per-project aggregate ask, and does your policy have that endorsement. And does the exhibit want completed operations at the same limit, because some policies carry a separate, lower one.

2. Additional insured

This is the clause that lists form numbers: “CG 20 10 and CG 20 37 or equivalent,” ongoing and completed operations. The GC wants to be added to your general liability policy so that a claim arising from your work can be tendered to your carrier instead of theirs.

The full explanation is in the additional insured article. The short check: your policy needs the endorsement, not just the words on a certificate, and it needs the completed-operations form if the exhibit asks for it, which almost every one does.

3. Primary and non-contributory

“Subcontractor’s insurance shall be primary and non-contributory to any insurance carried by Contractor.” Translated: when the GC tenders a claim to your policy, your carrier pays first and the GC’s carrier doesn’t have to contribute until yours is exhausted. Without this wording, two carriers spend the first year of a claim arguing about shares.

Most contractor GL policies can carry a primary and non-contributory endorsement. Confirm it’s there. If the exhibit also asks for it on the auto and umbrella, confirm it there too.

4. Waiver of subrogation

Subrogation is your carrier’s right to go after whoever caused a loss it paid. A waiver of subrogation gives that up as to the GC. The exhibit usually wants it on three lines: general liability, auto, and workers’ comp.

The comp waiver is the one that matters most. Your grader operator gets hurt because a GC’s crew left a hole uncovered. Your comp carrier pays. Without the waiver, the carrier can sue the GC to recover. With it, they can’t, and the GC’s own carrier likes that very much. Most carriers offer the waiver by endorsement, sometimes with a charge on the comp line. Ask whether yours is blanket (whoever your contract requires) or scheduled (one GC at a time).

5. Umbrella or excess

“Umbrella liability of not less than $5,000,000 following form over the general liability, auto, and employer’s liability.” The number varies with the size of the job and the GC. The words to check are “following form,” which means the umbrella tracks the terms of the policies under it, and whether the GC wants additional insured status and primary wording on the umbrella as well as the GL.

What we don’t control is whether the GC’s number fits your operation’s premium reality. A $5M ask on a small grading sub is a conversation, and sometimes the GC will accept less for a limited scope. Sometimes they won’t.

6. Workers’ compensation and employer’s liability

“Workers’ compensation as required by Colorado law, and Employer’s Liability of not less than $1,000,000 each accident.” Two separate things in one sentence. Comp is statutory: Colorado requires it at your first employee ( C.R.S. 8-40-203(1)(b); 8-44-101; 8-43-409), and the one-employee article covers that. Employer’s liability is the second half of the same policy and it covers the lawsuit that comes around the no-fault system. The exhibit’s number is a limit ask on that second half; statutory-minimum employer’s liability is usually below what GCs want.

Owner-operators with no employees hit a snag here. The GC still wants a comp certificate. Some will accept a signed owner rejection form; some require you to carry a policy that covers you anyway. In Colorado, a corporate officer or LLC member who owns at least ten percent of the corporation or company and controls, supervises, or manages its business affairs may elect to reject workers' compensation coverage by written notice on a Division-approved form sent by certified mail to the insurer (C.R.S. 8-41-202), while a working general partner or sole proprietor is not covered unless they elect to be included by endorsement as an employee of the insured (C.R.S. 8-40-302(5)(b)). (C.R.S. 8-41-202(1), (4); 8-40-302(5)(b)) Ask before you bid, because this one changes your cost structure.

7. Automobile liability

“Business auto liability covering any auto, including hired and non-owned, with a combined single limit of not less than $1,000,000.” Three checks. Is the limit a combined single limit, which your policy needs to match, not the state’s split-limit minimum. Does “any auto” mean the symbol on your policy has to be the broad one. And is hired and non-owned on the policy, for the rented lowboy and the laborer driving his own pickup to the yard.

The 25/50/15 article explains why the state minimum and the contract number are a long way apart, and what that means for the dump truck. The commercial auto page covers the policy itself.

8. Pollution liability

Not every exhibit has this clause, and the ones that do come from GCs who’ve been burned. “Contractor’s Pollution Liability of not less than $1,000,000 per claim,” sometimes with a note that the GL’s pollution exclusion doesn’t satisfy it. For excavation, that clause is pointed at fuel spills, hydraulic line failures, and what’s in the dirt you move. For grading and site prep on a redevelopment lot, it’s the buried tank nobody disclosed.

If the exhibit asks for it, your GL’s pollution exclusion is what it’s asking around. The pollution liability page covers the policy. The XCU article covers the GL’s related exclusions for underground work.

9. Notice of cancellation and the paperwork rules

The last section is procedure: certificates before mobilization, renewal certificates before expiration, copies of endorsements on request, and advance written notice to the GC if a policy is cancelled. That notice clause is the one agents watch most closely, because the number of days the contract wants has to match what the carrier will actually endorse. Some exhibits also want the GC to receive notice for non-payment cancellation, which carriers treat differently. Read the days in the clause, then ask us whether the carrier will issue that endorsement. If not, the GC needs to know before signing, not after.

Public work reads the same way

The clauses don’t change much when the other party is an agency instead of a GC. The numbers and the named parties come from the permit. CDOT’s right-of-way permits are the public example we see most.

Same shape: limits, additional insured status, certificates before work starts. A grading sub working state right-of-way outside Aurora and a private lot in Denver in the same month reads two exhibits, and the checklist above works for both.

A table for the truck

What to ask the GC before signing

Three questions, in writing. Which clauses will you waive for a sub of my size and scope? Will your carrier accept the standard endorsement forms, or does the exhibit require manuscript wording? And who at your office reviews certificates, so we can send the endorsements with the first submission instead of the third?

Where to go from here

If you’re about to sign your first GC subcontract, Get Insured starts with the exhibit, because the policy has to be built to satisfy it. Already have a policy and an exhibit that doesn’t match? The policy review marks each clause against the dec page and tells you which endorsements are missing. Either way, send the exhibit before Friday, not on it.

Serving businesses located in Colorado. Coverage is determined by the policy language and the carrier.