Glossary
Construction compliance glossary
Plain-English definitions of subcontractor compliance, insurance, and tax terms every general contractor should know.
Contract
AIA G702
The standard American Institute of Architects payment application form used on commercial construction projects.
AIA G703
The continuation sheet that accompanies AIA G702, breaking down the pay application line by line.
Lien Waiver
A legal document in which a subcontractor waives their right to file a mechanic’s lien in exchange for payment.
Mechanic’s Lien
A legal claim filed by an unpaid contractor against a property for work performed or materials supplied.
Insurance
ACORD 25
The standard industry form used to issue a Certificate of Insurance.
Additional Insured(AI)
A party named on another entity’s insurance policy via endorsement, extending coverage to them.
Certificate Holder
The party that receives a Certificate of Insurance from the insured.
CG 20 01
The ISO endorsement making a policy's coverage primary and non-contributory with respect to another policy.
CG 20 10
The ISO endorsement that adds a party as Additional Insured for ongoing operations.
CG 20 37
The ISO endorsement adding Additional Insured status for claims arising from completed operations.
CG 24 04
The ISO endorsement waiving the insurer’s right of subrogation against a named party.
Commercial General Liability(CGL)
The foundational liability policy covering bodily injury and property damage a business might cause.
Contractor Controlled Insurance Program(CCIP)
A project-specific insurance program where the general contractor provides coverage for all subcontractors.
Excess Liability
A policy that provides additional limits but only on the same terms as the underlying policy.
Monopolistic State
A state where Workers' Comp insurance must be purchased from a single state-run fund.
Named Insured
The entity that owns the insurance policy and is the primary party covered.
Owner Controlled Insurance Program(OCIP)
A project-specific insurance program where the owner provides coverage for all participating contractors.
Primary and Non-Contributory(PNC)
Policy language requiring one party's insurance to pay first in full without contribution from another party's policy.
Umbrella Policy
An insurance policy providing additional limits above the underlying CGL and Auto policies.
Waiver of Subrogation
A contractual agreement where an insurer waives its right to recover from a specified party after paying a claim.
Workers’ Comp Exemption
A state-issued certificate allowing sole proprietors with no employees to opt out of Workers’ Comp coverage.
Workers’ Compensation(WC)
Insurance providing medical care and lost wages to employees injured on the job.
Tax
Backup Withholding
A 24% withholding the IRS requires on 1099 payments when the payee's tax information is missing or incorrect.
Form 1099-NEC
The IRS form used to report nonemployee compensation paid to a contractor.
Form W-9
The IRS form used by US persons to provide a Taxpayer Identification Number to a payer.
Taxpayer Identification Number(TIN)
A unique identification number issued by the IRS for tax reporting purposes.