insurer wants to know if we use subcontractors what does this have to do with the policy

Subcontractors are a risk question, not a procurement question

The insurer asks this to properly assess the risk on the policy, not to control how you procure. If you work with subcontractors, the question is who is on the construction site or at the client, who is liable if something goes wrong, and whether those subcontractors are themselves insured. This directly affects your liability coverage: damage caused by a subcontractor is sometimes covered, sometimes not covered under your own policy, depending on the policy terms and what you disclosed about this when taking out the policy.

Insurers often ask this in combination with questions about subcontracting as standard practice versus occasional hiring, and about the contractual arrangements you make with subcontractors regarding liability and insurance. If you have no fixed policy and subcontractor deployment varies by project, it is perfectly fine to report it that way — a "no, no fixed subcontractors" is just as valid an answer as a detailed list, as long as it is accurate. What the insurer does not want is to be surprised after a claim by a subcontracting structure he knew nothing about. That is the same logic as with the question about your financial health: the insurer wants to know in advance what he is insuring, not a surprise afterwards.

Why this is separate from the UBO and anti-money laundering questions

This question often appears in the same questionnaire as questions about your business structure, but has a different legal basis. Questions about ultimate beneficial owners or the source of funds follow from the Anti-Money Laundering and Terrorist Financing Prevention Act, which requires client due diligence. The subcontractor question has nothing to do with that law — it does not appear anywhere in a legally required client investigation, but follows purely from the insurer's own acceptance and claims policy. This also explains why the bank often asks very different questions than the insurer about apparently the same business: the bank looks at anti-money laundering risk, the insurer at claims exposure. A fixed answer with supporting documents is usually not available here — unless you have a standard subcontractor contract template that you routinely attach, this is typically a question you answer freshly for each policy application on a factual basis.