Sample Subcontractor Agreement for Excavating Businesses

Nate Jones
Aug 3
3 min read

As your excavation business grows, you may find yourself subcontracting work to other contractors to meet demand or expand your service offerings. Whether you're hiring a grading specialist, a demolition crew, or a utility trenching expert, having a clear subcontractor agreement contract is essential to protect your business and ensure smooth operations.

In this blog, we’ll walk through the key components of a subcontractor agreement and provide a sample template you can customize. Plus, we’ll show you how Excavating Insurance Partners can help you meet insurance requirements and safeguard your business.

Why You Need a Subcontractor Agreement

A subcontractor agreement helps you:

Define the scope of work
Set payment terms and timelines
Clarify insurance and liability responsibilities
Avoid misunderstandings and legal disputes

Key Elements of a Subcontractor Agreement

Here’s what every excavation subcontractor agreement should include:

Parties InvolvedClearly identify the primary contractor and the subcontractor, including business names and contact information.
Scope of WorkDescribe the specific tasks the subcontractor will perform (e.g., trenching, grading, hauling).
Project Location and DurationInclude the job site address and expected start and completion dates.
Payment TermsOutline the total payment, payment schedule (e.g., upon completion, milestones), and method of payment.
Insurance RequirementsSpecify the types of insurance the subcontractor must carry:

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Licensing and ComplianceRequire proof of proper licensing and adherence to OSHA safety standards.🔗 OSHA Excavation and Trenching Safety
Termination ClauseDefine conditions under which the agreement can be terminated by either party.
Dispute ResolutionInclude a process for resolving disagreements (e.g., mediation, arbitration).

Sample Subcontractor Agreement Template

***DISCLOSURE & WARNING***Please note that this template is for inspiration and informational ONLY, it is always neccessary to review any agreement or contract with an attorney in your state or jurisdiction. Failure to do so, may result in damages******

Subcontractor Agreement

This Subcontractor Agreement (“Agreement”) is entered into on [Date], by and between:

Contractor: [Excavating Business Name], located at [Business Address], referred to as the “Contractor,”and Subcontractor: [Subcontractor Name], located at [Business Address], referred to as the “Subcontractor.”

1. Scope of WorkSubcontractor agrees to perform the following services at [Job Site Address]:

[Excavation task, e.g., trenching, grading, hauling, land clearing]
[Additional services, if any]
All work must be completed in accordance with industry standards and applicable regulations.

2. Project Duration

Start Date: [MM/DD/YYYY]
Completion Date: [MM/DD/YYYY]
Time is of the essence. Any delays must be communicated in writing.

3. Payment Terms

Total Payment: $[Amount]
Payment Schedule: [e.g., 50% upon commencement, 50% upon completion]
Method of Payment: [Check, ACH, etc.]
Subcontractor must submit an invoice upon completion of work or per agreed milestones.

4. Insurance RequirementsSubcontractor shall maintain the following insurance coverage throughout the duration of the project:

General Liability Insurance: Minimum coverage of $1,000,000 and name us as Additional Insured.
Workers’ Compensation Insurance (if applicable)
Commercial Auto Insurance (if operating vehicles on site)
Equipment Insurance (for owned or rented machinery)

Proof of insurance must be provided to the Contractor prior to the start of work.

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5. Licensing and Compliance Subcontractor must hold all necessary licenses and certifications required by local, state, and federal authorities. All work must comply with OSHA Excavation and Trenching Safety Standards.

6. Termination Clause Either party may terminate this Agreement with [X] days’ written notice. In the event of termination, Subcontractor shall be compensated for work completed to date.

7. Indemnification Subcontractor agrees to indemnify and hold harmless the Contractor from any claims, damages, or liabilities arising from Subcontractor’s work, negligence, or failure to comply with this Agreement.

8. Dispute Resolution Any disputes shall be resolved through [mediation/arbitration] in the jurisdiction of [County, State].

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Contractor Signature: ___________________________

Name: [Printed Name]

Title:

Subcontractor Signature: _________________________

Name: [Printed Name]

Title:

Date: _________________________________

Using a subcontractor agreement ensures professionalism, protects your business, and keeps projects running smoothly. As you grow your excavation company, having the right contracts—and the right insurance—will help you scale with confidence.

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