You hire a subcontractor for a project.
Before they start, you ask for a Certificate of Insurance. They send it over showing General Liability, Workers’ Compensation and maybe Commercial Auto coverage with limits that look good.
You save the certificate.
Done, right?
Not necessarily.
A Certificate of Insurance, or COI, is an important part of managing subcontractor risk. It can help confirm that the subcontractor has insurance in place, which coverages they carry, their limits and their policy dates.
But there’s an important distinction:
The certificate is evidence of insurance. It is not the insurance policy itself.
A COI does not amend, extend or alter the underlying insurance coverage, and it does not guarantee that coverage will apply to a particular claim. The actual policy and its endorsements determine coverage.
So if your subcontractor risk-management process ends with “we have a COI on file,” there may be more worth reviewing.
1. Does the Name on the COI Match the Company You Actually Hired?
Start with something simple.
Look at the Named Insured on the certificate.
That should make sense compared with the legal entity that entered into your subcontract.
If your contract is with ABC Plumbing LLC but the insurance certificate is issued to a different company or individual, that’s something worth clarifying before work starts.
The COI should also show the relevant policy types, policy numbers, limits and effective/expiration dates.
2. Are the Required Coverages and Limits Actually There?
Suppose your subcontract requires:
- $1 million General Liability
- Workers’ Compensation
- Commercial Auto
- $1 million Umbrella
Don’t simply see four rows with numbers and file the certificate away.
Compare the certificate to the insurance requirements in the contract.
Are the required policies shown?
Are the limits sufficient?
Will the policies remain in effect while the subcontractor is performing the work?
Travelers recommends reviewing COIs before work begins and keeping current certificates on file rather than allowing them to expire unnoticed.
And different subcontractors may create different insurance needs. Depending on the work, Professional Liability, Pollution Liability or other specialized coverage may also matter.
3. Certificate Holder Is Not the Same Thing as Additional Insured
This is one of the distinctions contractors should understand.
Being listed as the certificate holder means you are the person or organization receiving the certificate.
That does not, by itself, make you an additional insured under the subcontractor’s policy.
If your contract requires additional insured status, the COI may indicate that status, but the actual additional insured coverage comes from the policy and applicable endorsement, not from the certificate itself.
Travelers’ construction risk-control guidance treats the COI and the Additional Insured endorsement as separate components of contractual risk transfer.
So when additional insured status matters, don’t assume that seeing your company name somewhere on the certificate settles the question.
4. What Happens After the Subcontractor Finishes the Job?
Not every construction claim happens while work is being performed.
Imagine a plumbing subcontractor installs a pipe incorrectly.
The project is finished.
Months later, the connection fails and causes significant water damage.
That’s a completed-operations type of exposure: the alleged problem comes from work that has already been completed. General Liability can distinguish between ongoing operations and completed operations.
If your subcontract requires additional insured protection for completed operations, this is an area where the actual policy endorsement matters.
A COI by itself does not tell you everything you may need to know about how that protection applies.
5. What About Primary & Noncontributory and Waiver of Subrogation?
Construction contracts frequently contain insurance requirements beyond simply carrying General Liability.
Two examples are:
Primary and Noncontributory: This is generally intended to make the subcontractor’s applicable insurance respond before seeking contribution from the additional insured’s own insurance when the requirement applies.
Waiver of Subrogation: This can restrict an insurer’s ability to recover amounts it paid from another party when the applicable policy and contractual requirements support the waiver.
These requirements can get technical quickly.
The important lesson for the contractor isn’t that you need to memorize endorsement numbers.
It’s this:
If your subcontract requires a specific insurance provision, don’t assume typing it onto a certificate automatically creates that coverage.
Your insurance agent can help review the insurance documents, while an attorney familiar with construction contracts should review the legal and indemnification provisions.
6. Workers’ Compensation Can Create Another Problem
Workers’ Compensation deserves its own attention.
If a subcontractor is uninsured, the hiring contractor can potentially face additional Workers’ Compensation exposure or premium consequences depending on the circumstances and applicable state rules.
Travelers advises maintaining valid Workers’ Compensation certificates for independent and subcontracted work and notes that, without appropriate proof, subcontracted work can potentially be included in premium calculations.
That means you shouldn’t just collect a certificate once.
You want evidence that the subcontractor had appropriate coverage during the period when the work was actually being performed.
A COI Is Part of the Process. Not the Whole Process
A good subcontractor risk-transfer process is broader than collecting certificates.
Travelers’ construction risk-control guidance identifies several pieces that can work together:
- Written contracts
- Clearly defined insurance requirements
- Indemnification provisions
- Current Certificates of Insurance
- Additional Insured endorsements
- Subcontractor selection and qualification
- Good documentation and record retention
The legal pieces of that process should be developed with qualified construction counsel.
The insurance pieces are something your insurance agent should be helping you understand.
Before Your Next Subcontractor Starts Work
Instead of asking only:
“Did we get their COI?”
Consider asking:
“Does the insurance documentation we received actually match what our contract requires?”
Those are two very different questions.
If your business regularly uses subcontractors and you’re not sure how your current insurance requirements, certificates and endorsements fit together, we can help review the insurance side of your subcontractor process and identify questions worth addressing with your legal counsel.