Independent Contractor Exclusion

The Independent Contractor Exclusion takes away General Liability coverage for general contractors that use independent contractors or subcontractors in connection with a claim unless such independent contractor or subcontractor has valid and collectible insurance that meets certain minimum requirements. The independent contractor or subcontractor is normally required to carry General Liability limits of at least $1,000,000 Each Occurrence/ $1,000,000 General Aggregate Including Products/Completed Operations. In addition, there is usually a requirement to carry Workers’ Compensation as required by the state where the job is located.

These types of exclusions can be risky since there is no guarantee that an insured independent contractor or subcontractor will keep his insurance in force indefinitely without lapse.