Insurance question

Hi all,
I’ve just very recently formed an LLC for purposes of title vesting on a future rehab project…
Here’s my question: while I know to have a builder’s risk policy w/ umbrella coverage, should I also buy a workman’s comp rider? The several GC’s I’ve talked to don’t carry any workman’s comp insurance for their subs. Alternatively, can getting the GC and each sub to execute a liabilty waiver serve the same purpose - protect my personal a** and assets? While I know I have a degree of personal asset protection from the corporate veil afforded by an LLC, I’m uneasy w/ this situation as even successfully defending a frivolous suit against the LLC can be an expensive pain, thanks to the ambulance-chasing types of lawyers who file these things.
Thanks in advance,

great question. sorry i don’t readily have an answer - i’m interested in the responses you get.

The key to contracting is risk transfer, as you know. It’s a shame you’re using a GC that doesn’t require his subs to carry at least limits equal to his policy but unfortunately they usually don’t care. If one of the subs gets hurt, you’ll be named in the suit for owner’s/job site negligence. Depending on your state, this can get ugly.

If you haven’t gone into contract with the GC yet…ask them to get you an OCP policy in your LLC name. They pay for the limits and no one can touch them but you. It’s reasonable and protects the job/you from claims up to the policy limit ($1mm). If you’re already in the contract, you may be screwed unless you want to cancel the job and get a new GC.

Why aren’t you working with an agent that knows about this stuff? Not having any underlying insurance opens everyone up for a payday.

Thanks for the reply and info…Fortunately, I’m not in contract w/ any GC, nor have I actually contacted an agent - what prompted my question was prepping for a future project and this is one of the many bases to cover…
It is unfortunate that GC’s don’t seem to care either about my potential liability (but that’s ultimately my responsibility) or their subs. I may be wrong and I hope I am, but I suspect that one reason the subs’ welfare isn’t considered is that here in Texas, many of them are illegals. I think that the GC’s know from “experience” that 1) The subs will be given free medical treatment regardless of their illegal status and 2) The subs won’t sue anyone for fear of deportation.
I do have an insurance agent identified who’s a member of the local REI club, so I’m hoping he’ll know what’s best w/o writing policies that make me pay through the nose!

I think that your GC should carry the insurance that you need. If you are acting as the GC yourself then you may want to contact your local branch of the Texas Association of Builders ( and find an insurance agent that specializes in the types of policies you’ll need.

I’m not 100% sure on this part, but I think that your GC’s General Liability policy should protect you against workers comp claims for his subs.

If you are hiring a GC, make sure that they are registered with the state (

Worker’s comp covers your employees…you don’t have employees so you don’t need to purchase worker’s comp. What you need is a liability policy to cover the job site…an OCP.

Discuss it with an agent and go with a reputable company because if they go under you’ll be hanging to dry in the event of a claim.

Focus on A+ rated companies only.

Good Luck.

and make an insurance contingent part of your contract with the GC.

Something like

(You) shall be provided with copies of all insurance held by the GC and any subs that will be doing work on your jobsite at least 10 days prior to any work being done.

Not providing the required notice of insurance shall not be a reason for the GC or any sub to hold (YOU) in default or interference of this contract.

The above clauses give you the right to (1) inspect the insurance coverage of all companies doing work on your site, (2) time to verify the coverage is still in effect and (3) does not give the gc or sub an opportunity to claim you stalled the contract in any way.