Most construction contracts have a page or two about insurance. It’s easy to skim. But that section decides who pays when something goes wrong on a job, and it often asks for more than a standard policy gives you.

This guide explains the terms you’ll see most, in plain words. It’s written for Florida general contractors and trade subcontractors. Property owners and managers who hire contractors may find it useful too.

This is general information about insurance, not legal advice. Contracts are legal documents. Have your attorney review indemnity and other legal terms before you sign.

Why the insurance section matters

The contract tells you what insurance you have to carry. Your policy decides what you actually have. When the two don’t match, you can be in breach of the contract, and you may end up paying for a loss yourself.

Three things to keep in mind:

  • The contract can’t add coverage to your policy. Only your policy and its endorsements can. An endorsement is a written change to a policy.
  • A certificate of insurance doesn’t add coverage either. It’s a summary. More on that below.
  • Requirements flow down. What an owner asks of a general contractor is often passed down to every sub. If you’re a sub, you may be asked to protect people you’ve never met.

That’s why we ask to see the insurance section of a contract before you sign. It’s much easier to fix a gap or ask for a change at that point than after a claim. We review only the insurance portion of a contract. We don’t review or interpret its legal terms, so have your attorney review the indemnity section and the rest of the contract.

Additional insured: ongoing and completed operations

When a contract says to name someone as an additional insured, it means your liability policy should also protect them, for claims tied to your work. A general contractor might ask this of a sub. An owner might ask it of a general contractor.

There are two time periods, and they’re usually separate endorsements:

  • Ongoing operations covers the additional insured while you’re doing the work.
  • Completed operations covers them after your work is finished. Many construction claims, such as water damage from a bad seal, show up after a job is done. Some contracts ask you to keep this in place for a set number of years after completion.

A policy can meet one and not the other. If your contract asks for both, check that your policy has both.

Other details that matter:

  • Scheduled or blanket. A scheduled endorsement names each additional insured. A blanket endorsement covers anyone you agreed in a written contract to add. Blanket wording is common, but it usually needs the written contract to be signed before the loss.
  • Who is covered, and for what. Many additional insured endorsements cover the other party only for injury or damage caused, in whole or in part, by your work or your actions. They usually aren’t meant to cover the other party for its own mistakes alone.
  • No broader than the contract. Many current endorsements limit additional insured coverage to what the contract requires and what the law allows. If your contract asks for less, that may be all the other party gets.
  • Your limits are shared. Additional insureds usually share your policy limits. A large claim against them can use up limits you might need yourself.

Primary and noncontributory

Sometimes more than one policy could pay for the same claim. Policies have rules for who pays first, called “other insurance” rules.

When a contract asks for your coverage to be primary and noncontributory, it means:

  • Primary: your policy pays first for the additional insured, before the additional insured’s own policy.
  • Noncontributory: your policy won’t ask the additional insured’s own policy to share the cost.

Standard policies don’t always work this way on their own. It usually takes an endorsement. Some contracts also ask your umbrella to sit on top of your primary policy for the additional insured. Check your umbrella’s wording too.

Waiver of subrogation

When your insurance company pays a claim that someone else caused, it can often go after that party to get its money back. That’s called subrogation.

A waiver of subrogation is a promise that your insurance company won’t do that to a certain party, such as the owner or general contractor on your job. Contracts often ask for it on:

  • General liability
  • Commercial auto
  • Workers’ compensation
  • Umbrella

A few points to know:

  • It has to be on the policy. If your contract promises a waiver and your policy doesn’t allow one, you could be in breach of the contract. Your insurance company may also be able to say you hurt its rights.
  • Blanket or specific. Some policies allow a blanket waiver where a written contract requires it. Others need each party listed.
  • Workers’ comp waivers can cost extra. The waiver endorsement’s instructions say a premium charge may apply, either for each party or as a blanket charge. Ask before you bid so you can build it in.
  • Property waivers are different. Contracts and leases also include waivers between parties for property damage. Those connect to your property or builders risk policy, so check that policy too.

Indemnity and hold harmless: Florida’s s. 725.06

An indemnity or hold harmless clause is a promise to pay for, or defend, someone else’s losses. In construction it’s usually a promise from the party lower down the chain, like a sub, to protect the one above it.

Florida limits these clauses in construction contracts. Under s. 725.06, Florida Statutes, in general:

  • A promise to cover the other party for damage caused in whole or in part by that other party’s own fault is void unless the contract includes a monetary limit that bears a reasonable commercial relationship to the contract and is part of the project specifications or bid documents.
  • For a party in a direct contract with the property owner, the limit for the owner can’t be less than $1 million per occurrence unless the parties agree otherwise.
  • The clause can’t require you to cover damage caused by parties outside the chain listed in the statute.
  • It can’t cover the other party’s gross negligence or its willful, wanton or intentional misconduct.
  • It also can’t cover the other party’s statutory violations or punitive damages, except to the extent you or the people working under you caused them.
  • Contracts with public agencies follow separate rules in the same statute.

How a court reads a clause depends on its exact wording, so this is a question for your attorney.

Where insurance comes in: a general liability policy usually covers some liability you take on in a contract, through what policies call an “insured contract.” That coverage has limits and conditions. It’s also separate from additional insured coverage. Indemnity is a promise you make. Additional insured status is coverage your policy gives. Contracts often ask for both. We can show you how your policy treats each.

Certificates of insurance: what they do and don’t do

A certificate of insurance (COI) is a one-page summary of a business’s policies on a given date. It’s useful. But the common certificate forms say they’re for information only. They don’t change, add to or extend the coverage in the policies.

So a certificate that lists someone as an additional insured doesn’t make them one. The policy has to include the right endorsement. That’s why many contracts ask for copies of the endorsements along with the certificate.

When you collect certificates from your subs, check:

  • The named insured matches the company you’re contracting with
  • The policy dates cover the whole job
  • The limits meet your contract
  • The additional insured wording you need, for both ongoing and completed operations
  • Any waiver of subrogation and primary and noncontributory wording your contract requires
  • Workers’ comp coverage or an exemption

Also note: a certificate usually only promises notice of cancellation to the holder if the policy itself provides for it. Track expiration dates and ask for updated certificates at renewal.

Our subcontractor certificate checklist walks through each step.

1099 subcontractors and Florida workers’ comp

Many contractors pay subs on a 1099 and assume that keeps those workers off their workers’ comp. In Florida construction, that’s often not how it works.

  • Florida’s workers’ comp law counts many construction subs as employees. Under s. 440.02, people paid by a construction contractor as a subcontractor are generally treated as employees unless the sub has a valid exemption or its own workers’ comp. So are independent contractors working in construction.
  • Uninsured subs become your responsibility. Under s. 440.10, if a sub doesn’t have its own coverage, the contractor above it is liable for the sub’s employees on that job.
  • You’re required to collect proof. The same section requires a contractor to get evidence of workers’ comp from each sub. A sub with an exempt corporate officer has to give you a copy of the exemption certificate.
  • An exemption covers only the officer named on it. It doesn’t cover the sub’s other workers.
  • Audits find it. At your workers’ comp audit, payments to subs who can’t show coverage or a valid exemption are often added to your payroll and charged. The same thing can happen on a general liability audit.

You can look up a business’s Florida workers’ comp coverage and exemptions on the Division of Workers’ Compensation’s public search. Keep a copy of what you find in your job file. Florida law also lets a contractor that pays benefits for an uninsured sub’s workers recover them from the sub, unless they agreed in writing that the contractor would provide coverage. Talk with your attorney about how your subcontracts handle this.

For more, see our workers’ compensation page and experience mod guide.

The “your work” exclusion, in brief

General liability generally pays for damage your work causes to other property, or injuries it causes to people. It generally doesn’t pay to fix or redo your own faulty work. That’s the “your work” exclusion.

There’s an important exception for work done by your subs, and some policies remove that exception by endorsement. Our guide to the “your work” exclusion explains how it works, with examples.

Before you sign: what to send us

  • The insurance section of the contract, plus any insurance exhibit or rider
  • The indemnity or hold harmless section, so we can compare it with your policy’s contractual liability coverage. Your attorney should review what it means legally.
  • Any limits the contract asks for, including per project aggregate limits and umbrella
  • Who has to be named as additional insured, and for how long after completion
  • Whether it asks for waiver of subrogation or primary and noncontributory wording, and on which policies
  • The project type, especially residential or condo work, which some policies limit

We’ll compare it with your current policies and tell you what matches, what doesn’t and what endorsements might close the gap. Some changes need the insurance company’s approval, and some add premium.

Frequently asked questions

Can you add the general contractor as an additional insured just by issuing a certificate?

No. A certificate only summarizes the policy. The general contractor has to be covered by an additional insured endorsement on the policy. Many policies have blanket wording that does this when a written contract requires it. We’ll check yours.

The contract asks for completed operations coverage for several years. Is that normal?

It’s a common request in construction contracts. Claims can come up years after a job is finished. Keeping that promise usually means keeping a general liability policy with completed operations coverage, and the right additional insured wording, for the whole period.

Does my general liability cover the indemnity promise in my contract?

Often in part. Many policies cover liability you take on in an “insured contract,” subject to the policy’s terms, conditions and limits. Some endorsements narrow it. Your attorney can tell you what the clause means. We can explain how your policy’s wording may apply. Your insurance company decides coverage on any claim.

My sub says their workers are all 1099. Do I still need their workers’ comp certificate?

Yes. In Florida construction, a sub’s workers can count as your employees for workers’ comp if the sub has no coverage or valid exemption. Collect a certificate or exemption from every sub before they start, and check it again at renewal.

Is a waiver of subrogation bad for me?

Not necessarily. It’s a common contract term. It can cost extra on some policies, and it has to match what your policy allows. Ask us before you agree to one.

Sources

This is general educational information, not legal advice. McGriff-Williams Insurance does not provide legal services. Coverage depends on each policy’s terms, conditions and endorsements. It also depends on underwriting. Statute references are to the 2026 Florida Statutes. Have your attorney review indemnity, hold harmless and other contract terms.

Questions? A licensed member of our team can talk it through with you. McGriff-Williams Insurance is an independent insurance agency in Gainesville, in business since 1983 and licensed in Florida. We’re at 3501 W University Ave, Gainesville, FL 32607. Call (352) 371-7977, Monday to Friday, 9 a.m. to 5 p.m.

Where confidence grows.

Last updated October 31, 2026