Insurance & LiensQuestion 1497 of 1605
Which of the following is the BEST reason a general contractor requires subcontractors to name it as an additional insured and provide certificates of insurance?
a.To eliminate the general's need for workers' compensation
b.To satisfy the mechanics lien statute
c.To reduce the subcontractor's premium
d.To transfer liability risk from the sub's work onto the sub's insurer and confirm coverage is in place
Explanation
Requiring additional insured status plus a certificate of insurance shifts liability arising from the sub's operations to the sub's insurer and documents that coverage exists. It is a core risk-management practice, unrelated to workers' comp obligations or lien statutes.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)