Construction Subcontractor Agreement Template: Free Download (2026)

60%+ of GC–sub disputes involve scope ambiguity, undefined payment terms, or missing insurance requirements — all preventable with a written agreement (ASA, 2024).

Key Takeaways

• A sub agreement must cover: scope, payment, schedule, insurance, indemnification, change orders, and termination
• Always require Additional Insured status on the sub's GL policy — the single most important insurance clause
• Flow-down clauses pass your prime contract obligations to subs — critical on commercial projects
• The SOW is Exhibit A to the agreement — not a substitute for it

The 11 Clauses Every Sub Agreement Needs

1. Parties and Project Identification

Include sub's license number — contracting with an unlicensed sub can void your insurance and expose you to liability.

2. Scope of Work

Attach the full scope as Exhibit A. Body of agreement just references it:

"Subcontractor shall complete the Work described in Exhibit A. Work not in Exhibit A requires a written change order."

See our construction scope of work template.

3. Contract Price and Payment Terms

Subcontract Price: $___________

Payment Schedule:

Mobilization: $_____ (upon execution)

Progress Payment #1: $_____ (upon: _________)

Progress Payment #2: $_____ (upon: _________)

Final Payment: $_____ (upon acceptance)

Timing: 10 days after Contractor receives Owner payment.

Retainage: 10% withheld; released with final payment.

Pay-when-paid vs. pay-if-paid: Pay-when-paid passes timing risk to the sub; pay-if-paid passes non-payment risk. Pay-if-paid is void in many states (CA, NY, others) — check your state before including it.

4. Project Schedule

Start/completion dates, coordination with master schedule, time is of the essence. Sub not liable for delays caused by GC, owner, or force majeure.

5. Change Orders

"All scope changes require a written, signed change order before work proceeds. Verbal authorizations are not valid."

See our construction change order template.

6. Insurance Requirements

Commercial General Liability:

Per occurrence: $1,000,000 | Aggregate: $2,000,000

[GC name] named as Additional Insured ← required

Workers' Compensation: Statutory limits

Employer's Liability: $500,000/accident

Commercial Auto: $1,000,000 CSL

Certificates required before mobilizing.

7. Indemnification

Sub indemnifies GC for claims arising from sub's negligent acts — excluding claims caused by GC's sole negligence. (Most states prohibit requiring a sub to cover the GC's own negligence.)

8. Lien Waivers

• Conditional waiver required with each pay application
• Unconditional waiver required within 10 days of payment
• Conditional final waiver with final pay app; unconditional final upon payment

See our construction lien waiver template.

9. Warranty and Defective Work

1-year workmanship warranty from substantial completion. Defects corrected within 10 business days at no cost. If sub fails to correct, GC may back-charge.

10. Flow-Down Provisions

Sub is bound by all applicable prime contract terms. No direct claim against owner. GC's rights against sub are no less than owner's rights against GC for the same matter.

11. Termination

• For cause: material breach uncured after 10 days' notice — pay completed work only
• For convenience: 7 days' notice — pay completed work, non-returnable materials, demobilization costs

Copy-Ready Template

SUBCONTRACTOR AGREEMENT

Date: _______________________

Project: _____________________ Address: ___________________

Prime Contract Ref: __________

CONTRACTOR: ____________________ License #: ________

SUBCONTRACTOR: _________________ License #: ________

─────────────────────────────────────────────────────────

1. SCOPE OF WORK

Per Exhibit A. All changes require written change order.

1. CONTRACT PRICE AND PAYMENT

Subcontract Price: $___________

Mobilization: $_____ upon execution

Progress #1: $_____ upon _______________

Progress #2: $_____ upon _______________

Final: $_____ upon acceptance + final lien waiver

Payment: 10 days after GC receives Owner payment.

Retainage: 10%; released with final payment.

1. SCHEDULE

Start: ___________ Completion: ___________

Time is of the essence.

1. CHANGE ORDERS

Written + signed before work proceeds. Cost plus [___]%.

1. INSURANCE (required before mobilizing)

CGL: $1M/$2M — GC named Additional Insured

Workers' Comp: statutory | Auto: $1M CSL

1. INDEMNIFICATION

Sub indemnifies GC for sub's negligent acts; excludes GC's

sole negligence.

1. LIEN WAIVERS

Conditional with each pay app. Unconditional within 10 days

of payment. Final waivers at project close.

1. WARRANTY

1 year from substantial completion. Defects corrected within

10 business days at no cost to GC.

1. FLOW-DOWN

Sub bound by applicable prime contract terms. No direct

claim against Owner.

10. TERMINATION

For cause: 10 days' notice; pay completed work only.

For convenience: 7 days' notice; pay completed work +

non-returnable materials + demobilization.

11. GOVERNING LAW: [State]. Disputes: mediation before litigation.

EXHIBITS: A — Scope of Work | B — Schedule | C — Insurance

─────────────────────────────────────────────────────────

Contractor: ___________________________ Date: __________

Subcontractor: ________________________ Date: __________

Insurance Verification Checklist

[ ] Certificate of Insurance received

[ ] CGL per occurrence $1M minimum ✓

[ ] CGL aggregate $2M minimum ✓

[ ] GC named as Additional Insured ✓

[ ] Workers' Comp — statutory limits ✓

[ ] Auto — $1M CSL ✓

[ ] Policies don't expire mid-project ✓

[ ] Carrier AM Best A-VII or better ✓

Do not allow mobilization without verified certificate.

Relevant Article:Pressure Washing Contracts Template: A Practical, Copy‑Paste Agreement (With Clauses That Prevent Disputes)

Trade-Specific Add-Ons

Electrical / plumbing: Sub pulls permits, schedules inspections. Work not covered until inspected and approved.

Roofing: 10-year workmanship warranty; completed operations coverage for 3 years post-completion.

Concrete / foundation: Compaction test reports required. Work not proceeding to next phase without GC approval of test results.

T&M subs: Daily T&M tickets signed by GC field supervisor. Uncovered tickets not compensated.

Sources: American Subcontractors Association 2024 · AGC Subcontracting Best Practices 2024 · ConsensusDocs 750