What is the difference between a general contractor and a subcontractor?

General contractor and subcontractor are structurally different roles in a construction project. Confusing the two — or failing to verify both — is a common source of project failure.

General contractor (GC):

- Holds the master contract with the homeowner. - Pulls the master permit (and sometimes named sub-permits). - Manages the schedule, sequencing, and quality across all trades. - Provides single-point accountability to the homeowner. - Carries general contractor license (California B-General Building, Arizona B-1/B-2, Florida CBC/CRC, North Carolina NCLBGC) and broad commercial general liability insurance, plus workers compensation for any in-house crew. - Typically marks up subcontractor work 10-20% as project management overhead. - Is the legal entity the homeowner pays.

Subcontractor (sub):

- Holds a contract with the GC, not the homeowner. - Performs a specific trade scope (electrical, plumbing, HVAC, roofing, drywall, framing, tile, painting, landscaping, etc.). - Pulls trade-specific sub-permits under the master permit (or under their own license where the jurisdiction requires). - Carries trade-specific state license (California C-10 electrical, C-36 plumbing, C-20 HVAC, C-39 roofing, etc.). - Carries trade-specific workers compensation and general liability. - Is the legal entity the GC pays. The homeowner does not pay the sub directly.

The structural model:

Homeowner → contract → General Contractor General Contractor → contract → Subcontractor (electrical) General Contractor → contract → Subcontractor (plumbing) General Contractor → contract → Subcontractor (HVAC) General Contractor → contract → Subcontractor (roofing) (etc.)

Why this structure matters for verification:

1. Both the GC and each sub need to be verified. The homeowner verifies the GC license and runs Groundcheck on the GC entity. The GC verifies each sub's trade license. The homeowner SHOULD ALSO verify each sub's trade license — because if the GC fails or disputes arise, the sub's qualifications affect resale and warranty.

2. Mechanics lien risk. Subs can file mechanics liens against the HOMEOWNER'S PROPERTY if the GC fails to pay them — even though the homeowner has no contract with the sub. The homeowner may end up paying twice (once to the GC who pocketed it, once to the sub to clear the lien) or face foreclosure. Defense: require lien waivers from EVERY sub at every payment milestone, and demand the GC name all subs with license numbers in the contract.

3. Permit hierarchy. The GC pulls the master permit; subs pull sub-permits under it. If a sub is unlicensed, their sub-permit cannot be issued or is issued under a fraudulent license, and the entire permit chain can be voided.

4. Insurance overlap. The GC's policy doesn't necessarily cover sub work. Subs need their own GL and WC. If a sub's worker is injured, that sub's WC is the first line; the GC's policy is secondary. If neither covers, the homeowner can be liable.

5. Warranty hierarchy. The GC provides a workmanship warranty on the overall project (typically 1 year). Trade-specific warranties from subs are usually 1-5 years on labor and run with the equipment manufacturer warranties (e.g., 25 years on roofing manufacturer warranty if installed by certified roofer).

Edge cases:

1. Owner-builder structure. The homeowner is the "GC" on paper (pulls permits, hires subs directly). This is legal in most states (with some restrictions — California requires the homeowner to live in the property for at least 1 year after completion, can only build one home in a 3-year period). The homeowner now bears full project management risk and must verify every sub individually.

2. Design-build firms. A single firm holds both design (architect) and construction (GC) credentials. Verification: confirm both credentials are active.

3. Self-performing GCs. Some GCs self-perform certain trades (typically framing, drywall, painting) rather than subbing them out. Verify the GC has crew with appropriate trade training, even for trades they self-perform.

4. Subcontractor lien releases. When the GC pays a sub, the sub signs a lien release. When the homeowner pays the GC, the homeowner should require an unconditional lien release from every sub for work performed up to that payment milestone. Without unconditional releases, the homeowner is exposed.

5. Joint checks. For high-dollar subs (HVAC equipment, custom cabinetry), the homeowner can write a joint check payable to BOTH the GC and the sub. The check cannot be deposited unless both endorse. This eliminates the GC-pockets-the-sub-payment risk.

Verification checklist:

For the GC: - State GC license (active, correct classification for project size). - General liability insurance (verified by direct carrier call). - Workers compensation (verified by direct carrier call). - Phoenix-company check (multiple LLC formations and dissolutions = red flag). - Court records (mechanics liens FILED against the GC, judgments, lawsuits). - BBB record.

For each major sub: - State trade-specific license (electrical, plumbing, HVAC, roofing — verified at state board). - General liability and workers compensation (verified by direct carrier call). - Court records. - BBB record.

Groundcheck (earthmove.io/trust) verifies both GC and sub licenses across state boards and bundles court records, OSHA citations, and BBB complaints. Run a separate Groundcheck on the GC AND on each major sub (the electrician, the plumber, the HVAC contractor, the roofer). They are different entities with different risk profiles. See also the general-contractor-vs-subcontractor-verification topic for the verification deep-dive.