How to Protect Your Homebuilding Business from Subcontractor Insurance Gaps

Why COIs Alone Aren’t Enough to Protect Builders from Risk

When you build homes, you’re not just managing materials and labor. You’re managing risk—whether you know it or not. One of the biggest blind spots we see in the building industry? Subcontractor insurance compliance.

Most builders think their subs are covered. They have a certificate of insurance (COI) on file, so they assume everything is in order. But here’s the truth: 50% of those certificates are invalid.

The Subcontractor Coverage Problems That Can Leave Builders Liable

• Expired policies
• Missing endorsements
• Hidden exclusions
• Unbound coverage

When something goes wrong—a flood, a fire, an injury—you pay. Your builder’s risk insurance or general liability insurance kicks in. Premiums rise. Margins vanish.

In one case, a builder had 112 subcontractors. Only 47 had valid, compliant insurance. The rest? Paper shields.

Completely useless. This kind of exposure can wreck a company.

Why Subcontractor Insurance Compliance Is Often Overlooked

Because builders are construction experts—not compliance officers. They rarely have a system in place for real-time verification, exclusion reviews, or tracking policy limits.

That leads to false peace of mind—and real financial exposure.

5 Steps to Improve COI Tracking and Subcontractor Risk Management

• Define insurance standards Be specific about the types and limits of coverage required.
• Require endorsements Always request Additional Insured, Waiver of Subrogation, and Primary Non-Contributory clauses.
• Set policy expiration reminders If coverage lapses mid-job, you could be fully liable.
• Use a COI tracking system Spreadsheets aren’t enough—use tools that flag invalid or expired certificates.
• Audit every COI Either do it manually or work with a construction insurance expert who can.
• Turn Compliance Into Protection with a Construction-Focused Risk Partner

At Maverick, we help builders build airtight subcontractor compliance programs that close coverage gaps before claims hit. If you’re subbing out 80% of the work but taking on 100% of the risk—you don’t have a business. You have a lawsuit waiting to happen.