TL;DR: A general contractor holds the prime contract with you, pulls the permits, hires and manages the subcontractors, and is the single accountable party if something goes wrong. Subcontractors are licensed trade specialists (electricians, plumbers, framers, tile setters) who work under the GC’s direction on a specific scope. You pay the GC; the GC pays the subs. That chain of accountability is what you are actually buying when you hire a GC.
If you are comparing bids and one of them is from a GC while another is from a framing crew who says they can “coordinate the other trades,” you are not comparing apples to apples. The difference in price often reflects a real difference in who carries the risk, who holds the license, and who is responsible when the plumber’s schedule slips and the tile crew shows up anyway. Here is how the roles actually break down.
What does a general contractor do that a subcontractor does not?
A general contractor is the project’s single point of accountability. They hold the contract with you, carry general liability insurance and workers’ compensation that covers the whole site, pull the building permits in their name, schedule and supervise every trade, and handle inspections from start to final sign-off. If a subcontractor causes water damage or a framing error, the GC is the party you call and the party legally responsible for making it right.
Subcontractors are specialists. A licensed electrician, a plumbing crew, a drywall company, a concrete flatwork team: each one has deep expertise in their trade and holds the license required for that specific work. But their contract is with the GC, not with you. They are not responsible for coordinating the other trades, managing the schedule, or making sure the project passes inspection as a whole.
Here is a side-by-side comparison of how the two roles divide the key responsibilities:
| Responsibility | General Contractor | Subcontractor |
|---|---|---|
| Holds the prime contract with the owner | Yes | No |
| Pulls building permits | Yes | Rarely (trade permits only, e.g., electrical) |
| Carries site-wide general liability insurance | Yes | Carries their own trade-specific coverage |
| Hires and pays the other trades | Yes | No |
| Schedules and sequences the work | Yes | Works within the GC’s schedule |
| Responsible for final inspections | Yes | Responsible for their trade inspection only |
| You write checks to them | Yes | No (paid by the GC) |
| Can file a mechanics lien against your property | Yes (typically waived at final payment) | Yes, if the GC does not pay them |
What happens if you hire subcontractors directly?
Hiring trade contractors directly instead of through a GC can save money on the GC’s markup, but it transfers significant risk to you as the property owner. You become the de facto project manager, and that comes with real legal and financial exposure.
Permit responsibility. In California, building permits are typically pulled by a licensed contractor. If you hire individual subs and manage the project yourself as an owner-builder, you can pull an owner-builder permit, but you are then personally attesting that you will perform the work or that it qualifies for an exemption. The California Contractors State License Board (CSLB) at cslb.ca.gov outlines owner-builder rules and the limits that apply. One key limit: if you sell the home within five years, you may be required to disclose the owner-builder work, which can complicate a sale.
Mechanics lien exposure. This is the liability angle most homeowners miss. If you pay your framing sub but the framing sub does not pay their lumber supplier, that supplier can file a mechanics lien against your property, even though you already paid. When a licensed GC manages the project, they are responsible for paying their subs and suppliers. Proper lien releases at each payment milestone protect you. When you are the one writing checks to five different trade contractors, you need to collect lien releases from each of them and their material suppliers. That is a real administrative and legal burden.
Coordination risk. Trades depend on each other in a specific sequence: foundation before framing, framing before rough electrical and plumbing, rough-ins before insulation, insulation before drywall. When one trade runs late, every trade behind it in the schedule is affected. A GC manages those dependencies and absorbs the scheduling friction. When you manage the subs directly, you absorb it, and delays compound fast.
Insurance gaps. Each sub carries their own liability coverage, but it covers their scope only. If a dispute arises about who caused a problem (the plumber’s leak or the drywaller’s patch?), you may find yourself between two contractors and their insurers with no one clearly responsible. A GC’s site-wide general liability policy covers the project as a whole.
Do you need a general contractor for a remodel?
For a single-trade project, you probably do not. Replacing a water heater, painting a room, or installing flooring are scopes where hiring a licensed specialist directly makes sense. The work is contained, the permit situation is simple or nonexistent, and there is no coordination problem to solve.
For multi-trade projects, a GC typically earns their fee. Kitchen remodels, bathroom remodels, room additions, and new construction all involve multiple licensed trades working in sequence. The GC’s markup (typically 15-25% of project cost) covers their license, their insurance, their scheduling work, and their accountability. On a $150,000 kitchen remodel, that markup buys you a single contract, a single point of contact, and a single party responsible for the finished product.
For commercial projects, a licensed GC is almost always required. Commercial building permits in California require a licensed general contractor in most cases, and lenders and insurers typically require it as well. If you are building out a tenant improvement, a new commercial building, or a mixed-use space, the GC is not optional.
For more on how to evaluate GCs before you sign anything, see 15 Questions To Ask a Contractor Before Signing a Construction Contract and How To Choose a General Contractor (Without Getting Burned).
How do you verify a contractor’s license in California?
The CSLB maintains a free public license lookup at cslb.ca.gov. You can search by license number, business name, or individual name. The lookup shows the license classification (a Class B general building contractor license is the standard residential and commercial GC credential), the license status (active, expired, suspended), the bond amount, and whether any disciplinary actions are on record.
Before signing any contract, verify:
- The license is active and in the name of the entity you are contracting with
- The license classification matches the scope of work
- The contractor carries current general liability insurance and workers’ compensation
- The bond is current (California requires a $25,000 contractor’s bond)
Ask for a certificate of insurance directly from the contractor’s insurer, not just a copy the contractor hands you. A certificate from the insurer confirms the policy is active and names you as an additional insured for the project duration.
What should your next step be?
If your project involves multiple trades, a permit, or a scope above roughly $50,000, get bids from licensed general contractors rather than assembling your own sub team. The coordination, permit, and lien-risk factors outlined above are real, and the GC’s fee is the cost of transferring that risk to a party who is equipped to manage it.
When you review bids, make sure each GC is quoting the same written scope. Bid gaps on multi-trade projects almost always trace back to scope differences, not efficiency differences. A detailed written scope before bidding is the single best way to get comparable numbers.
TDI USA, Inc. handles general contracting, commercial construction, and new construction across Sacramento and the surrounding region. If you have a project in planning and want to talk through scope and budget before committing to a bid process, call (877) 688-0866.
About TDI USA, Inc.
TDI USA, Inc. is a licensed and insured general contractor based in Sacramento, CA, serving the greater Sacramento Valley since 1985. With more than 40 years of construction and rebuilding experience across commercial, industrial, and residential projects, TDI USA handles everything from ground-up new construction and tenant improvements to full home remodels and insurance rebuilds. Their crews serve Sacramento, Roseville, Folsom, Elk Grove, Rancho Cordova, and surrounding communities.