What Every Builder Should Know About Working with Subcontractors: Insurance, Protection, and Best Practices

General contractors: Learn how to protect your business when hiring subcontractors. From insurance to vetting, here’s what every builder needs to know.

If you’re a general contractor or builder in Mansfield, Fort Worth, or anywhere in the DFW area, subcontractors are a vital part of getting your jobs done efficiently. But working with subs also opens your business up to potential liability, delays, and financial risk—especially if you don’t take the right precautions up front.

At McKnight Insurance Services, we regularly help builders protect themselves when hiring subcontractors. In this blog, we’ll walk you through everything a builder needs to know, including:

• What to ask before hiring a subcontractor
• What insurance coverage subs should have
• How to avoid liability for your subcontractor’s mistakes
• Legal and contractual best practices

Why It’s Critical to Vet Your Subcontractors

Let’s be honest: not every subcontractor is equally reliable. And in a high-growth, high-pressure market like DFW, the temptation to hire “whoever’s available” can lead to costly problems down the road.

If a subcontractor:

• Causes property damage
• Injures someone on the job site
• Fails to carry proper insurance
• Doesn’t complete their work per spec or code

…it could be you, the general contractor, who ends up liable—unless you’ve protected yourself properly.

What to Ask Before Hiring a Subcontractor

When onboarding a subcontractor, ask the following:

• Are you licensed and bonded (if applicable)?
• Do you carry general liability insurance?
• Do you have workers’ compensation insurance (even for yourself)?
• Can you provide a current Certificate of Insurance (COI)?
• Do you have recent references or completed projects I can review?
• Do you use subs of your own, and are they insured?

Document all of this. Keep copies of their COIs and licenses on file for every job.

What Insurance Should a Subcontractor Have?

At a minimum, require every sub to carry:

1. General Liability Insurance

Protects against third-party claims for bodily injury and property damage. Look for at least $1 million per occurrence, with you named as additional insured on their policy.

2. Workers’ Compensation

Covers injuries to their employees or themselves (if sole proprietor). Even if not required by Texas law, you should insist on it—it protects you from being sued by their injured worker.

3. Commercial Auto Insurance (if they drive to job sites)

Essential if the sub or their crew drives vehicles for business. If an accident happens while hauling materials to your site, you don’t want that liability bouncing back to you.

4. Umbrella/Excess Liability (for high-risk trades)

If your project involves roofing, excavation, structural framing, or other high-risk work, consider requiring higher limits or an umbrella policy.

Additional Insured Status: Don’t Skip This

You should always request to be added as an additional insured on the subcontractor’s general liability policy. This gives you direct coverage if a claim arises from their work.

Also request a waiver of subrogation, which prevents their insurance company from trying to recover costs from you if something goes wrong.

Written Contracts Are a Must

Every subcontractor agreement should include:

• Scope of work
• Payment terms
• Timeline and deadlines
• Insurance requirements (spelled out clearly)
• Indemnity clause (holding you harmless if they cause a claim)
• Dispute resolution terms

Having everything in writing protects you if a sub walks off the job, delays your schedule, or delivers shoddy work.

Other Common Questions from Builders

Q: What if my subcontractor doesn’t have insurance?

 A: Don’t hire them. Or, if you must, talk to us about how to extend your coverage to protect yourself. This should be a last resort.

Q: Can I be held liable for their employee’s injury?

 A: Yes, if they don’t have workers’ comp. Texas doesn’t mandate coverage, but without it, you could be named in a lawsuit.

Q: What if they hire another sub without telling me?

 A: You need to require all subcontractors disclose and provide proof of insurance for any further subs they use. This is known as sub-sub liability.

Q: Should I keep all this paperwork?

 A: Absolutely. Keep every COI, license, and contract for at least 3–5 years after the job ends.

Why This Matters in DFW’s Fast-Paced Construction Market

With so much new construction happening in Mansfield, Fort Worth, and throughout North Texas, general contractors are under pressure to deliver faster, hire quicker, and manage more projects at once.

Don’t let a subcontractor’s mistake become your financial problem. One bad decision could cost you a claim, lawsuit, or your reputation.

How McKnight Insurance Helps General Contractors

At McKnight Insurance Services, we work with builders and GCs across DFW to:

• Review subcontractor COIs
• Customize liability policies to include subcontractor exposure
• Set up master policies that protect you even if your subs don’t
• Respond fast to questions and COI requests

We understand the risks you face—and we’re here to help you manage them with confidence.

Are you frustrated with your insurance? Don’t leave your business exposed. Contact McKnight Insurance to speak with a local agent who understands the construction industry inside and out.

Let’s make sure your subs don’t put your business at risk.