Signing a contract issued by a general contractor without reading and understanding it entirely can be risky. You could be putting your entire company (as well as your personal possessions, home, etc.) at risk, without even knowing it.

In our agency we have seen so many different contracts out there, some that are very simple and many that are very complex.
We always recommend our clients to present the contract to his or her attorney for review before signing it.

It is not uncommon for our client to ask us to review the insurance requirements in contracts in order to advise what types of insurance are needed to comply with those requirements. We will review the contract and give our client list of deficiencies. Some of them can be remedied by buying coverage, others are beyond what the company or even the industry is willing to do.

The trend in risk management is to try to transfer all liability (or as much as legally possible), whether insurable or not, to subcontractors. It takes a smart, well-trained, experienced and qualified person to identify exposure in lengthy or complex contracts.
You can usually bid work without liability insurance but most often you cannot perform the work without it.
The insurance costs vary based upon the amount of liability you go with, i.e.: one million, two million, three million or more. It also varies based upon the type of work you will be doing, the gross receipts of your company and total payroll expenses.

For most of the projects you will work on, you will be required to provide a 'certificate of insurance' from your insurance agent. In addition to regular certificate you may be required (as specified in the contract) to add general contractor to your policy as an Additional Insured; which will extend your coverage to the additional insured person or organization. In most cases, additional insured are given coverage only for their vicarious liability arising out of the acts of the named insured. The insurance company may charge you between $50 and $350, for each. 

If you are required to add several entities as Additional Insured you may consider adding Blanked (Automatic) Additional Insured Endorsement to your policy. But please remember that this type of endorsement is not valid where there is no written contract.

What does it mean when general contractor asks you to add him to the policy as an additional insured on primary non-contributory basis?
It means that your insurance will provide the primary source of recovery and the insurance of general contractor will not contribute to defense or indemnification if the general contractor be sued as the result of an accident caused by you.

Sometimes you may be asked to provide Waiver of Subrogation endorsement issued by an insurer that waives its right of recovery against others. The policy language says that insurance company has the right to recover all or part of the payment made under the policy from a third party. In most cases company providing General Liability Policy may charge you about $250 for this endorsement.
To add this endorsement to your Workers Compensation policy company may require copy of a signed contract with general contractor, and fee may depend on job performed and value of the contract. 

Keep in mind that your current insurance may or may not be in compliance with any written contract. In our experience, no insurance policy or collection of insurance policies will completely cover most of your indemnification promises. I have seen clients signing “contracts to sell their soul” and they were extremely lucky that did not have any accidents.
At ABI Insurance Agency we make clear to our clients that insurance not always will protect them against liability they are picking up by signing a contract.

Disclaimer: Any representative of ABI Insurance Agency is an attorney nor do we have any legal training whatsoever, everything we include here is strictly examples based upon our and our clients actual experiences. Please speak with an attorney to make sure the construction contract that has been issued to you is acceptable and worded properly.