A subcontractor's certificate of insurance (COI) proves a policy existed when the certificate was issued, but it doesn't prove you're protected. Before a sub starts work, check that the right business is insured, the policies are current, the limits meet your contract, and the endorsements you need, especially additional insured and waiver of subrogation, are actually attached to the policy. Then keep a copy on file.
If you're an HVAC, electrical or general contractor, here's the checklist we recommend.
Why the Certificate Alone Isn't Enough
The standard certificate form says, right on its face, that it's issued as a matter of information only and doesn't amend, extend or alter the coverage of the policies listed. In other words, it's a snapshot, not a promise.
Claims go wrong when a contractor relies on the certificate and later learns the sub's policy:
- was canceled for nonpayment after the certificate was issued,
- named a different business entity than the one that did the work, or
- excluded the exact type of work the sub performed.
The Subcontractor COI Checklist
Check each of these before the sub starts work:
- Named insured matches the contract. The business name on the certificate should match the entity you hired, including LLC or Inc.
- Policies are current. Effective and expiration dates should cover the entire job.
- General liability limits meet your contract. Many contracts call for $1 million per occurrence and $2 million aggregate, plus products and completed operations.
- Additional insured status. Your company should be added for ongoing and completed operations. This is usually done by endorsement (commonly ISO forms CG 20 10 and CG 20 37, or the carrier's equivalent).
- Waiver of subrogation and primary and non-contributory wording, if your contract requires them.
- Workers' compensation. Confirm the sub has a policy for their employees, or understand why they don't. Pennsylvania's Department of Labor & Industry explains employer requirements.
- Commercial auto, if the sub drives on your job sites or hauls materials.
- Umbrella or excess, if your contract requires higher limits.
- Description of operations that fits the work they're doing for you.
Ask for the Endorsements, Not Just the Certificate
The most useful habit is simple: ask for copies of the actual endorsements. A certificate may show a checkmark in the "additional insured" box, but the endorsement is what creates the coverage. Read who it covers and whether completed operations are included.
It's also worth watching for exclusions on the sub's policy that could leave you exposed. Common ones in construction include exclusions for residential or multi-family work, roofing, or work subcontracted to others.
Tip: Call or email the agent listed on the certificate to confirm the policy is active. It takes five minutes and can prevent a very expensive surprise.
A Quick Example
An HVAC contractor hires a sheet metal sub for ductwork on a light commercial job. The sub's certificate shows $1 million / $2 million general liability, and the additional insured box is checked.
Months later, a ductwork connection fails and causes water damage to the tenant's inventory. The tenant sues both companies. If the sub's policy includes an additional insured endorsement covering completed operations, the sub's insurer may defend the HVAC contractor. If the endorsement only covered ongoing operations, or didn't exist, the HVAC contractor's own policy, and loss history, take the hit.
What happens if a sub isn't insured?
If a subcontractor has no coverage, or the coverage lapsed:
- Your general liability may end up responding to their mistakes, affecting your loss history and future premiums.
- Your workers' comp audit may treat what you paid them as payroll, adding premium you didn't plan for.
- You may be responsible for injuries to their workers, depending on the circumstances and state law.
Keep It Organized
Keep a simple file for every sub: certificate, endorsements, the contract, and expiration dates. Set reminders to request updated certificates at renewal. If you'd like, we can review a sub's certificate or your standard subcontract against your own policy.
Bottom Line
A certificate of insurance is where your review starts, not where it ends. Verify the business, the dates, the limits and, most importantly, the endorsements before work begins, and keep everything on file. It's one of the simplest ways to protect your own policy.
Common Questions
Does a certificate of insurance make me an additional insured?
Not by itself. The standard certificate form states that it doesn't amend, extend or alter coverage. Additional insured status comes from an endorsement on the subcontractor's policy, so ask for a copy of it.
What happens if my subcontractor doesn't have workers' comp?
Depending on your state and the situation, you could be responsible for injuries to their workers, and your own workers' comp audit may charge premium for payroll paid to uninsured subs.
How often should I collect new certificates?
Before each job starts, and again when a sub's policy renews. Track expiration dates so no one works on an expired policy.
Can I just call the agent listed on the certificate?
Yes, and it's a good habit. The issuing agent can confirm the policy is active and whether the endorsements you need are actually attached.
Want a second set of eyes on your coverage?
We'll compare what you have against how you actually live and work, and tell you honestly if it's fine.
About the Author
Tom Nestor, Owner, Nestor Insurance Services
Tom owns Nestor Insurance Services, an independent agency in Phoenixville, Pennsylvania. He helps contractors, nonprofits, restaurants and families understand what their policies actually cover.
This article is general information, not legal advice or a description of any specific policy. Coverage depends on the policy issued, its terms, conditions and exclusions, and on underwriting approval.