Checklist
Subcontractor prequalification checklist
Before you sign a sub, check six things: license, insurance, safety record, money, references, and whether they will sign your terms. Insurance is just one step. A good certificate does not make a good sub, but a bad one is often the first warning sign.
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Free COI auditThe six checks
- License and registration. Look up the license in your state’s lookup tool. Confirm the business name, license class and status match the company signing your contract.
- Insurance. Collect certificates and endorsements for general liability, workers’ comp, auto and umbrella where your contract asks. Compare them to your requirements. See the COI compliance checklist.
- Safety record. Ask for their written safety program, incident history and any citations. Ask for their experience modification rate if they have one and your policy uses it.
- Money. Ask for recent financials or a bank reference. Bigger subs may have bonding. Late payments to their own suppliers are a warning sign.
- References and work history. Call at least two recent general contractors or owners. Ask about quality, schedule, cleanup and how the sub handled problems.
- Contract readiness. Confirm they will sign your subcontract, flow down your insurance requirements and carry the same requirements for their own subs.
Where insurance fits
Insurance is the cheapest check to automate and the easiest to forget. Do it first because a sub who cannot show coverage should not move to later steps. Keep the certificates, the endorsements and the date you verified them. Then track every expiration date, because coverage that is valid at prequalification may lapse mid-project. Read how to track subcontractor certificates.
A simple scoring approach
Give each check a pass, conditional or fail. Pass means documents received and verified. Conditional means a specific gap with a deadline, such as an endorsement still being issued. Fail means do not proceed. Write down the reason for any fail so the decision is consistent next time.
| Check | Document | Pass looks like |
|---|---|---|
| License | Lookup printout | Active, correct class, matches signer |
| Insurance | Certificate and endorsements | Meets your contract, dates cover the job |
| Safety | Written program, incident log | Documented and current |
| Financial | Financials or bank letter | Stable, no pattern of nonpayment |
| References | Two call notes | Would hire again |
| Contract | Signed subcontract | No major redlines to insurance or indemnity |
Common mistakes
- Prequalifying once and never rechecking. Policies renew, licenses lapse and finances change.
- Treating a certificate as proof of coverage. See how to verify.
- Skipping prequalification for small jobs. Small subs can create large claims.
- Letting one department collect insurance and another sign contracts without checking.
Not legal or insurance advice. This is general information. Your contract, your state and your policy decide what applies to you. Ask your broker or attorney.
Frequently asked questions
What is subcontractor prequalification?
It is a review of a subcontractor’s license, insurance, safety record, finances and references before you award work. The goal is to find problems before they cost you.
How often should I requalify subcontractors?
Check insurance before every policy expiration and review licenses and safety records at least once a year or before each new project.
Is insurance enough to prequalify a sub?
No. Insurance shows a minimum protection. License, safety record, finances and references tell you whether the sub can do the work well.
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