What is a certificate of insurance for contractors?

A contractor certificate of insurance (COI) is proof that a general contractor or subcontractor has the right coverage. It's a one-page summary that includes the type of insurance, policy limits, effective dates, and policyholder information. This document may also be called an ACORD certificate of insurance.

If your business hires general contractors and subcontractors, verifying their insurance coverage is an important step that can keep your jobs running smoothly when something unexpected happens. If you're being asked to provide one, Progressive Commercial customers can easily request a COI via phone or online.

Why contractors and subcontractors need a COI

General contractors and subcontractors need coverage to financially protect themselves and their customers from injuries, accidents, and other incidents that can occur on work sites.

Proof of insurance is often required during the early phase of a project. Your contractor COI may even be requested by municipalities or homeowners associations when jobs are being bid on.

If you're looking to win a contract and need a COI but don't have insurance yet, we can help. Progressive Commercial offers contractors insurance and coverage for plumbers, carpenters, and other types of tradespeople at affordable rates. Once you have a policy in place, you can quickly get a COI to prove coverage.

Requesting COIs from subcontractors

For general contractors who sub out work, certificates of insurance for subcontractors should be a standard request. Validating coverage may save you from paying out of pocket for damages or injuries if something goes wrong.

For example, if a roofer uses faulty materials that leak and cause water damage, the roofer's liability coverage would cover the cost of repairs. If coverage wasn't verified with a COI and the roofer didn't have insurance, the contractor would have to pay for the damages.

COIs verify contractor compliance

While a contractor's insurance certificate may not be legally mandated in all cases, the insurance it represents often is. Depending on their state and industry, contractors and subcontractors can be required by law to carry workers' comp, commercial auto, and general liability.

Do I need a COI if using contractors?

Yes, you should always request a COI from contractors and subcontractors who work on your job. In addition to verifying coverage, having proof of insurance reduces your risk of being held liable for accidents or damages. You should never work with a contractor or subcontractor who can't provide a valid certificate of insurance.

Understanding a contractor certificate of insurance

A valid contractor COI will be provided on a standard form by the insurer that summarizes insurance coverage. Knowing what's on the form and what to look for can help you verify the contractor's insurance coverage. The following explains what's listed on a COI and what it means:

  • Producer: The name of the insurance agent or broker.
  • Contact: Agent or broker's name, phone number, and email.
  • Insured: The policyholder — this should be the contractor's or subcontractor's legal business name.
  • Insurer: Insurance company or companies that issued the policy or policies.
  • Coverages: The type of insurance and whether there are additional insured (see below for more information).

    The following coverages will be listed, and the type of insurance will be marked and filled in with specific details:

    • Commercial general liability: The minimum coverage a contractor should have. This protects from injuries, accidents, and property damage.
    • Automobile liability: Contractors with company vehicles should also have this coverage.
    • Umbrella liability: An optional coverage that provides higher policy limits and broader coverage to fill in gaps for claims not covered by their other policies.
    • Excess liability: An optional coverage that provides higher limits in case other policy limits are reached. It doesn't offer broader coverage.
    • Workers' comp and employers liability: Coverage for workplace injuries, illnesses, and potential lawsuits.
  • Policy numbers: The policy number for each type of insurance.
  • Effective dates: Start of coverage and expiration dates. Check to make sure these dates encompass the project.
  • Limits: Policy limits are itemized according to the insurance coverage. For example, a commercial general liability policy may provide per-occurrence coverage with a limit of $1,000,000 per occurrence. The form also details policy limits for property damage, medical payments, and personal and advertising injury. Any exclusions would also be noted.
  • Certificate holder: If you requested a COI from a contractor, your business name would be listed here.

Should I be listed as an additional insured on my contractor's COI?

Yes. Being added as an additional insured your contractor's general liability coverage is recommended because it shifts liability away from you in the event of a claim. Your work agreement can require you to be added via an endorsement for both ongoing and completed work.

If you're a contractor who hires subcontractors, you should be listed as an additional insured on their policies as well. This clarifies who's financially responsible should any injuries or damage happen on your job site.

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What happens if a contractor doesn't have a COI?

Not having a COI can result in both legal and financial consequences for all parties involved. If a contractor can't provide a COI because they don't have insurance, the project owner can be exposed to financial and legal risks.

Contractors or subcontractors without adequate coverage could lose jobs and have to pay out of pocket for damages, injuries, and legal penalties.

For example, an electrical subcontractor's faulty work causes a fire during construction, resulting in $150,000 in damages. The general contractor didn't verify the subcontractor's COI and electrical contractor insurance coverage. The homeowner sues both parties, and the contractor is forced to pay for the uninsured subcontractor's portion.

How to request a contractor COI

Whether you're working with one of our expert agents or requesting the document online, Progressive Commercial makes it easy for you to get a contractor COI. Secure the proof of coverage you need in just a few simple steps.

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