General Contractor vs. Subcontractor: Who You Hire, Who's Liable, Who Holds the License

A general contractor holds the overall contract for your project and coordinates everyone who works on it; a subcontractor is a specialized trade — an electrician, plumber, framer, or tile-setter — that the general contractor hires and manages to complete one part of the job. The homeowner signs with the GC. The GC signs with the subs. That one line in the org chart quietly decides who you pay, who's accountable when something goes wrong, whose insurance responds, and — this catches people off guard — who's even licensed to touch your wiring.

If you've only ever hired one tradesperson at a time, the distinction can feel like jargon. On a multi-trade remodel in Allen, Plano, or Frisco, it's the difference between one accountable party and a dozen loosely connected ones you'd have to referee yourself. Here's what each role actually is, who carries the risk and the insurance, and when it genuinely makes sense to hire a subcontractor directly instead of routing the whole job through a general contractor.

The definitions, in one table

At the simplest level, the two roles differ by scope and by who they answer to.

	General contractor	Subcontractor
What they are	The party who holds the overall contract and runs the project	A specialized trade hired to perform one scope (electrical, plumbing, framing, tile, HVAC)
Who hires them	The homeowner	The general contractor
What they coordinate	Permits, scheduling, trade sequencing, inspections, the whole lot	Their own crew and their own slice of work
Who they answer to	You	The GC
What they're liable for	The entire job, including a sub's mistakes	Their own workmanship, to the GC

A general contractor's real product isn't swinging a hammer — it's coordination and accountability across every sub on the job. A subcontractor's product is depth in one trade. Both are essential; they simply sit at different levels of the same project.

Who you actually sign a contract with

Here's the concept that makes everything else click: contract privity — a direct contractual relationship between two parties. On a general-contractor job, you have privity with the GC and no one else. You sign one contract. The electrician, the plumber, and the framer all have contracts with the GC, not with you. If the tile is wrong, you take it up with the GC, and the GC takes it up with the tile-setter. You never manage the sub directly.

Flip that around and the whole structure changes. If you call the electrician, the plumber, and the framer yourself and line them up one by one, there's no GC in the middle — which means you are the general contractor now, with every scheduling handoff and every payment dispute landing on your desk. That's a legitimate path for the right project, but it's a different job than most homeowners realize they're signing up for. We weigh that trade-off honestly in design-build vs. managing your own contractors.

The Texas licensing twist most homeowners get backwards

Now the part that surprises almost everyone. In Texas, your subcontractors are more likely to hold a real state license than your general contractor is.

Texas has no statewide license for residential general contractors — no state exam, no license number to look up. General contracting is regulated at the city level, if at all. But the trades that touch wiring, gas, and pipes are licensed by the state: electricians and HVAC (air-conditioning and refrigeration) contractors through the Texas Department of Licensing and Regulation (TDLR), and plumbers through the Texas State Board of Plumbing Examiners (TSBPE). Those licenses are real, current, and searchable on each agency's public site.

Two honest caveats. First, not every subcontractor is a licensed trade — framers, tile-setters, drywall hangers, painters, and roofers generally aren't state-licensed in Texas, so "licensed" applies to specific trades, not to every sub on the job. Second, because there's no GC license to verify, you never vet a general contractor by the word "licensed." You verify insurance, bonding, and a checkable track record instead. (Our Texas contractor vetting checklist walks through exactly what to confirm.) When a truck says "licensed and insured" in Texas, the "licensed" half is describing the subs they hire — or nothing at all.

Who carries the liability — and whose insurance pays

Liability follows the contract. Because you're in privity with the general contractor, the GC is responsible to you for the entire project — including work performed by a subcontractor. If a sub damages your home or botches an install, your claim is against the GC, and the GC pursues the sub. You don't chase the plumber's insurer; that's the GC's problem to sort out.

The insurance stack usually looks like this: the GC carries general-liability coverage over the whole project, and each subcontractor carries their own general-liability policy, typically naming the GC as an additional insured so the sub's coverage backs up the sub's work. One Texas wrinkle worth knowing: workers' compensation is optional here — Texas is the only state where private employers can legally skip it — so a crew showing up doesn't guarantee the crew is covered. Verify it.

When you hire subs directly, that buffer disappears. There's no GC standing between you and a sub's mistake, no additional-insured protection flowing up to you, and no single party responsible for the finished whole. You've traded a markup for the entire risk pool.

Liens: the exposure that rides the contract chain

There's a Texas-specific reason the contract chain matters beyond convenience. Under Chapter 53 of the Texas Property Code, a subcontractor or supplier is a "derivative claimant" with independent lien rights — meaning a trade or material supplier you never signed a contract with can file a mechanic's lien against your home for unpaid work, even if you already paid your general contractor in full. Pay the GC, the GC fails to pay the framer's lumberyard, and that lumberyard can still come after your title.

Under a general contractor, managing this is routine plumbing of the job: the GC owns the payment chain, collects lien waivers at each draw, and provides a final bills-paid affidavit before the last check clears. Hire the subs yourself and you become the paymaster for every one of them — and the direct target for every lien. We cover the whole mechanism, including the 10% retainage that protects you, in can a contractor put a lien on my house in Texas?

When to hire a subcontractor directly

None of this means you should route every job through a GC. Plenty of projects are cleaner and cheaper handled as a single trade. Hire a subcontractor directly when the work is one self-contained trade with no multi-trade sequencing and no staged inspections:

• A straight roof replacement — one roofer, one scope.
• A water-heater swap, a panel change, or a couple of fixtures — a single licensed plumber or electrician.
• New flooring over an existing subfloor, a repaint, or a fence.
• Any clean, one-trade job that doesn't open a wall, move plumbing or gas, or touch the foundation.

For these, hire the specialist, verify their insurance (and their TDLR or TSBPE license if it's a licensed trade), and keep the markup. You don't need a general contractor to referee a project that only has one player.

The calculus flips the moment the job stacks three or more trades that must hand off in order, touches structure, or needs a permit with sequenced inspections — a kitchen that moves plumbing and a wall, an addition, a whole-home renovation. There, the subs still do the hands-on work, but somebody has to sequence them so the electrician doesn't rough-in before framing passes, so drywall doesn't close over failed plumbing, and so one name is accountable when trades collide. That coordination is the general contractor's entire job, and it's worth pricing honestly with a tool like our cost estimator before you decide. If you're weighing the call for a specific Allen project, do you need a general contractor to remodel in Allen? runs the three realistic paths.

What the GC's fee actually buys

The subcontractors' prices sit inside the general contractor's price — that's the economic version of the org chart. On top of the trades' costs, a GC adds overhead and profit. Consumer guides commonly put that combined markup around 15% to 25% of project cost, and 2026 industry data lands in the same territory or higher: combined overhead and profit now averages roughly 20%, and smaller or remodel-heavy jobs routinely run above that (2026 construction-finance and NAHB remodeler benchmarks; Angi's contractor-markup guidance — a market range, not a quote from The Remo Guys).

What that markup buys is exactly the coordination, single-point liability, and lien control described above — which is why the honest comparison is managed cost versus unmanaged cost, not fee versus free. We make that full argument in why hire a general contractor; this guide is just the map of who's who before you decide.

The bottom line

A subcontractor is a specialist you (or your GC) hire for one trade. A general contractor is the single accountable party who holds your contract, coordinates every sub, carries the liability for the whole result, and stands between your home and the lien chain. Know which one your project needs, and you'll know whether this is a one-phone-call job or a one-team job.

The Remo Guys are an insured and bonded design-build general contractor based in Allen, serving Allen, Plano, Frisco, McKinney, Prosper, and the rest of Collin County — one team, one contract, one point of accountability from permits to final walkthrough. If you're not sure whether your project needs a GC or just a good subcontractor, request a consultation and we'll give you a straight answer, even when it's "hire the specialist and skip us."