For contractors who use subcontractors, the subcontractor exposure is often as important as the contractor's own operations in the eyes of the underwriter. Getting this wrong — in either direction — leads to incorrect premium, coverage gaps, or audit surprises.
When a general contractor hires a subcontractor, the GC may be held liable for work done by that sub. If the sub injures someone or causes property damage, the property owner or injured party may sue the GC — even if the sub was the one who did the work. This is vicarious liability, and it is why underwriters ask detailed questions about subcontractors.
The ACORD 126 asks: What is the total cost of all subcontracted work in the past policy period? Do subcontractors carry their own general liability? Do subcontractors carry their own workers compensation? Does the insured collect certificates of insurance from all subcontractors?
Each of these questions affects premium. A contractor who uses uninsured subcontractors and doesn't collect COIs is a much higher risk than one who requires all subs to carry their own GL with the GC listed as additional insured.
Subcontractor cost for GL rating purposes is the total dollar amount paid to all subcontractors during the policy period. This is separate from the insured's own payroll. Both payroll and subcontractor cost are used to calculate the GL premium exposure base. Some carriers rate on both; others rate on total revenue. Agents need to know which exposure base applies for each carrier and collect the right figures accordingly.
Most clients don't spontaneously track their subcontractor costs by insured vs. uninsured sub. Agents need to specifically ask: Roughly how much did you pay to all subcontractors last year? Do you require all your subs to carry GL and WC? Do you collect their certificates before they start work?
AgencyAssist collects all of this through the client intake form and maps it directly to the ACORD 126 subcontractor fields.
AgencyAssist collects all the information covered here through a plain-English client intake link. No phone calls, no PDF forms, no missing fields — just a complete, submission-ready ACORD package.