Certificates of insurance for subcontractors: what a GC collects

Before a subcontractor sets foot on your job, you want proof that they carry the insurance your subcontract requires. That proof is the certificate of insurance, usually called a COI. It is a one-page summary of the sub's policies, issued by their insurance agent, and in the US it is almost always on the ACORD 25 form.

This guide is for the person in a general contractor's office who collects those certificates. It covers why they matter, what to look at on the form, what to ask for alongside it, and the problems that are easy to miss.

Why a GC collects them at all

Three reasons, and they stack:

• Claims follow the work. If a sub's crew damages property or injures someone, the injured party often names everyone on the project, including you. A sub with the right coverage, and with you added as an additional insured where your contract requires it, means their insurer can defend and pay claims arising from their work, instead of your own policy taking the hit.
• Your own insurer looks at your subs. At your policy's premium audit, many carriers ask for certificates for the subcontractors you paid. Payments to subs who were uninsured during the policy period can be added to your own premium basis, as if those workers were yours.
• Your contract with the owner often requires it. Owners and lenders pass insurance requirements down to you, and you pass them down to your subs. If you cannot show a sub's coverage when the owner asks, you are the one out of compliance.

Workers' compensation adds a fourth reason. In many states, a general contractor can end up responsible for workers' compensation benefits for an injured employee of an uninsured sub. How that works, and which exemptions a sub can claim instead of carrying a policy, depends on the state.

What is on the certificate

The ACORD 25 has the same sections every time, which makes it quick to check once you know where to look.

The form also says, near the top, that it is issued as a matter of information only and does not change the coverage of the policies listed. That sentence is why the certificate alone is not proof of every requirement.

The coverage lines you will usually see

Your subcontract decides what is required and at what limits. These are the lines most GCs ask for:

• Commercial general liability: each-occurrence and aggregate limits, plus products and completed operations.
• Automobile liability: for subs who drive vehicles to or around the site, usually as a combined single limit.
• Workers' compensation and employers' liability: the "per statute" box for workers' compensation, and separate employers' liability limits.
• Umbrella or excess liability: when your contract requires limits above the underlying policies.

Some trades bring others, such as professional liability for design-build work or pollution liability for abatement. If you are unsure what to require, your insurance broker is the right person to ask. The right limits depend on the project, the owner's requirements and your own policy.

Collect the endorsements, not just the certificate

A "Y" in the additional insured column is a statement on a summary. The coverage itself comes from an endorsement attached to the sub's policy. If your contract requires additional insured status, a waiver of subrogation or primary and noncontributory wording, ask for copies of those endorsement pages along with the certificate. Our guide on additional insured vs certificate holder explains the difference and what to look for.

A before-they-start checklist

• Certificate received from the sub's agent, not retyped by the sub
• Insured name matches the subcontract
• Your company is the certificate holder, with the correct address
• Every required coverage line is listed
• Every limit meets or exceeds your requirement
• No policy expires before the sub's scheduled work ends, or you have a reminder set for the renewal
• Additional insured and waiver of subrogation marked where required, with endorsement copies attached
• Workers' compensation policy, or a state exemption your contract and state accept
• Filed where anyone in the office can find it, with the expiration dates recorded

Red flags worth a phone call

• The dates do not cover the work. A policy that expires next month on a six-month job is not a problem yet, but it will be. Record it now.
• The insured is not who you hired. "Smith Drywall LLC" on the contract and "John Smith" on the certificate are not the same insured.
• No producer contact, or the certificate came as an editable file. Call the agent listed and confirm the policy is active. Altered certificates do happen.
• The description box is blank when your contract requires named additional insureds. That usually means the request to the agent never mentioned them.
• Workers' compensation is missing. Ask whether the sub has employees and what your state allows before you accept an exemption.

Keeping them current

Collecting the first certificate is the easy part. Policies renew every year, rarely all on the same date, and a sub who was covered on day one can lapse mid-project. Track every policy's expiration date and request the renewal about a month ahead. Our guide on how to request a certificate of insurance has email templates for the first request and the renewals.

COI Nudge does that part for you. Subs upload certificates through one link, it reads the expiry dates, and it emails the sub and their insurance agent at 30, 14 and 7 days before a policy lapses, until a new certificate arrives.