Subcontractor Paperwork Checklist: 7 Documents Before Work Starts
Before any subcontractor steps on your job site, you should have seven things on file: a signed master subcontractor agreement, a W-9, a certificate of general liability insurance, proof of workers’ compensation coverage, a signed scope and price for the specific job, a lien waiver process, and a current license where one is required. No paperwork, no work, no check. That one rule prevents a remarkable number of expensive problems.
Home building is a game of defense. If you’re in the business long enough, somebody will get hurt, something will leak, or somebody won’t get paid. The paperwork is what decides whether that’s an inconvenience or a catastrophe.
What paperwork do you need from a subcontractor?
Master subcontractor agreement. One base agreement, signed once, that governs every job you do together: payment terms, warranty, indemnification, insurance requirements, safety, cleanup, and how disputes get resolved.
Form W-9. Legal name, tax ID, and entity type. You need it for year-end 1099 reporting, and it’s much easier to collect before the first check than after the last one.
Certificate of insurance (general liability). Showing the limits your agreement requires, with your company named as an additional insured.
Workers’ compensation proof. A certificate, or whatever your state accepts for exempt owner-operators. If their worker gets hurt and they have no coverage, guess whose policy gets the call.
Job-specific scope and price. A signed bid, work order, or purchase order for each project. The master agreement says how you work together. This says what they’re doing on this house and for how much.
Lien waivers. Signed with every payment, in exchange for the check.
License and registration. For the trades that require one in your jurisdiction, with the expiration date tracked.
Why do you need a subcontractor agreement and not just a bid?
A bid tells you the price. It doesn’t tell you who pays when the shower pan leaks into the dining room two years later. The agreement is where you settle warranty obligations, who carries what insurance, who’s responsible for their employees and their suppliers, and what happens when things go sideways. Without it, you’re relying on everyone’s memory of a conversation in a truck.
What should you check on a certificate of insurance?
A certificate in a folder isn’t the same as coverage. Look at five things:
Policy dates. Is it current, and will it still be current when the work is done?
Limits. Do they meet what your agreement requires?
Additional insured status. Is your company actually named? Ask for the endorsement, not just the box on the certificate.
Exclusions. Some cheap policies exclude the exact work the trade performs. Your insurance agent can help you spot these.
The source. Get it sent directly from the agent or carrier, and set a reminder before it expires.
An expired certificate is a false sense of security. I talked about how misunderstood builder insurance is in 5 Torpedoes That Sink Builders.
How do lien waivers protect a builder?
A mechanic’s lien clouds the title to the property until it’s resolved, which can hold up a closing or a client’s final payment. A lien waiver is the trade’s signed statement that they’ve been paid and give up lien rights for that amount. Collect one with every payment.
Keep in mind that the suppliers your trades buy from may also have lien rights. People you never contracted with can make a mess of your project. Lien law is very state-specific, including the required forms and timing, so have a construction attorney in your state set this part up.
How do you get subcontractors to actually turn it in?
Make it a condition of payment. Accounts payable doesn’t cut a check to a vendor with a missing or expired document. Trades figure this out by the second invoice.
Send it as one package. One email, one set of documents, one deadline, before the first job.
Track expirations. A simple spreadsheet with insurance and license dates and a monthly review is enough.
No exceptions for the guys you like. The trade you’ve used for ten years is the one you’ll forget to check.
Frequently asked questions
Do I need a new agreement for every job?
No. Sign one master agreement, then issue a short work order or purchase order per project that references it.
What if a subcontractor doesn’t have workers’ comp?
Rules vary by state. In many places your own carrier can charge you premium for uninsured subs at audit, and you may carry the exposure if someone is hurt. Talk to your agent before that sub starts, not at audit time.
Is a W-9 enough to prove someone is an independent contractor?
No. Classification depends on the actual working relationship. The W-9 only gives you the tax information for reporting.
How long should I keep subcontractor records?
At least as long as your state’s statute of repose for construction defects, which is often many years. Ask your attorney for the number in your state, and keep digital copies.
BTW, if you want the whole system ready to send to your trades, grab our Subcontractor Paperwork Package over at the Building Optimal Shop, where you can check out the rest of our swag to build a better business. Proceeds go to benefit, Exponencialistas, my non-profit investing in entrepreneurs transforming their communities in Latin America.