Key Tips for Managing Certificates of Insurance

As an agent with contracting clients, handling issues around subcontractors and certificates of insurance is an essential part of risk management because failing to obtain, review, and update subcontractors’ certificates can expose your customers to significant liability risks.

Acuity is here to help! Use our handy, downloadable Certificate of Insurance Guide and Subcontractor Agreement Checklist to help your contracting clients better understand certificates.

When working with your contracting clients, keep these important points in mind:

• Check the Policy Period. Certificates on file should align with the customer's policy period. Coverage should also remain in effect for the entire contract period, including any required post-completion coverage.

• Confirm Liability Limits. A subcontractor’s liability limits should match or exceed your customer’s. If not, and if a claim surpasses the subcontractor’s coverage, your customer’s policy may be forced to contribute.

• Check Workers’ Compensation Coverage. If a subcontractor lacks workers’ compensation coverage, your customer may be held liable for injuries sustained by the subcontractor or their employees.

• ​​Follow Record Retention Guidelines. Keep certificates on file for at least two years after job completion or longer if specified in the contract.

• ​​​​​​​​​​​​​Ensure Adequate Coverage. Examine certificates to be sure that subcontractors’ insurance contains key coverage provisions, including: 
  • ​​​​​​Additional Insured Endorsements that extend to ongoing and completed operations.
  • ​​​​​​Primary and Noncontributory Language stating that a subcontractor’s insurance is  primary and does not require your customer’s policy to contribute to a loss.
  • Waiver of Subrogation to prevent a subcontractor’s insurer from seeking reimbursement from your customer’s policy for any claims they pay.
  • Per Project and Per Location Aggregate Limits that ensure broader protection by applying separate liability limits to each project and location.
  • ​​​​​​​​​​​​​​Notice of Cancellation. A subcontractor’s policy should include an endorsement requiring at least 30 days’ notice before cancellation.

By carefully managing certificates, you help your contracting clients minimize liability risks, maintain compliance, and protect their businesses from unexpected financial exposure.