Subcontracts pack indemnity language. COIs show additional insured endorsements. GCs often treat them as interchangeable — then discover after a claim that one was missing, void, or unenforceable in their state.
You need both concepts aligned: contract indemnity from the sub, and insurance that actually defends you when their work goes wrong.
What hold harmless / indemnity does
Indemnity (hold harmless) is a contract promise: the sub agrees to defend and pay for certain losses arising from their work.
Typical flow-down structure:
- Sub indemnifies GC
- GC indemnifies owner (upstream)
Indemnity is enforced through litigation and contract law — not by calling an insurance company.
What additional insured does
Additional insured status on the sub's GL policy gives the GC rights under the sub's liability insurance:
- Defense provided by sub's carrier (in many cases)
- Payment within policy limits for covered claims
- Protection without exhausting your own GL first
AI is enforced by submitting a claim to the sub's carrier — not by suing the sub for indemnity first.
See certificate holder vs additional insured for why certificate holder alone is insufficient.
Side-by-side comparison
| Indemnity / hold harmless | Additional insured | |
|---|---|---|
| Document | Subcontract | COI + endorsement (e.g. CG 20 10) |
| Who pays | Sub (personally/corporately) | Sub's insurance carrier |
| Scope | Contract-defined — may be broad | Policy-defined — covered perils/limits |
| State limits | Anti-indemnity statutes may cap | Insurance law + policy terms |
| Bankruptcy | Sub may not be able to pay | Carrier solvent obligation |
| Completed ops | Contract may extend years | Needs CG 20 37 |
Why you need both
Indemnity alone fails when:
- Sub is uninsured or underinsured
- Sub's assets cannot cover a large verdict
- Anti-indemnity law limits broad form indemnity in your state
Additional insured alone fails when:
- Claim exceeds sub's limits — you pay the gap
- Claim is excluded from sub's policy
- AI endorsement missing or defective
- Contract requires indemnity beyond insurance
Strong programs pair broad indemnity (where enforceable) with verified AI endorsements and adequate limits.
Common subcontract insurance clauses to align
Typical owner-driven package:
- Sub indemnifies GC for claims arising from sub's work
- Sub names GC additional insured on CGL (ongoing + completed ops)
- Primary and noncontributory language
- Waiver of subrogation on GL, WC, auto as specified
- Minimum limits — GL, WC, umbrella
- Sub's insurance shall not limit indemnity obligation
Your COI review must confirm insurance clauses — not assume the subcontract alone protects you.
State anti-indemnity statutes
Many states restrict broad form indemnity where the GC is indemnified for the GC's own negligence.
Implications:
- Indemnity clause may be partially void
- Insurance (AI) becomes even more important
- Consult construction counsel on subcontract template for your state
Do not copy California indemnity language into Texas contracts without review.
Verifying AI matches indemnity intent
Checklist:
- AI endorsements on file — not just COI checkbox
- CG 20 10 for ongoing operations
- CG 20 37 when completed ops AI required
- Umbrella AI if umbrella required
- Policy dates cover project + completed ops tail
- Named insured on COI matches indemnifying entity in contract
Indemnity without insurance — the uninsured sub problem
If sub has no GL, indemnity is a promise against empty pockets. That is the core uninsured sub risk.
Enforcement path: litigation → judgment → collection. Slow and expensive while owner pressure mounts.
Practical GC policy
- Never waive AI because subcontract has indemnity
- Never waive indemnity because you have AI
- Verify both at onboarding and renewal
- Block work when either insurance or signed subcontract is missing
- Train PMs — indemnity is legal; COI is risk transfer via carrier
Document retention
Keep:
- Executed subcontract with indemnity section
- All AI and WOS endorsements
- COI history showing continuous coverage
- Correspondence when sub requested limit or endorsement changes
Ten-year completed ops tail on remodel defect claims means retention matters.
Next: Primary, noncontributory, and waiver of subrogation · How to verify a subcontractor COI