Central Insurance Blog

Every construction project carries risk. That’s why general contractors must confirm their subcontractors are properly insured before anyone sets foot on a jobsite. 

Subcontractors must prove that protection is in place for themselves, the general contractor, and the project owner.

That’s where a certificate of insurance comes in. Far from just paperwork, a certificate of insurance confirms a subcontractor’s insurance coverage. Whether a general contractor is hiring a roofer, an electrician, or a flooring subcontractor, a certificate of insurance ensures everyone involved can move forward with confidence, knowing that subcontractors are compliant and risks are covered. 

Kelly Booth—Construction Specialist at Central Insurance—sees certificates of insurance as one of the simplest, most effective ways to create trust on a jobsite. 

“Think of a certificate of insurance as a snapshot of your protection,” she explains. “It gives general contractors peace of mind that the right coverages are in place, and it gives subcontractors a clear, professional way to show they’re aware of the requirements and are in compliance and ready to work.”

Now that we’ve explored why certificates of insurance are critical on construction projects, we’ll break down the most common coverages.

What Is a Certificate of Insurance?

A Certificate of Insurance (COI) is a one-page overview of a business’s active insurance coverages. It outlines the policies in force and the limits for each, so there is no confusion or ambiguity between the contractor and their subs. 

Some of the most common policies included in a COI for a subcontractor include:

• General liability
• Workers’ Compensation
• Umbrella insurance 
• Other specific coverages, if requested

Keep in Mind: The COI itself is not the policy; it’s simply a summary document issued by an insurance agent to show coverage is in place on the date of issuance.

Common Misconceptions About Certificates of Insurance

Contractors and subcontractors often misunderstand how to use certificates of insurance. Here, Booth highlights three of the most common misconceptions:

1. Myth: “I have to comply with every request.”

Reality: This is not always the case. Coverage requirements should reflect the scope of work. For example, a subcontractor hanging doors typically won’t need the same umbrella limits as a contractor operating heavy equipment. A certificate of insurance helps set appropriate expectations and opens the door for conversation when requirements don’t match the job.

2. Myth: “The certificate is proof of coverage.”

Reality: A certificate of insurance is only a summary of coverage. The actual policy contains full details. Many contractors choose to review endorsements or declarations for a more in-depth coverage overview when hiring a subcontractor. Used together, these documents provide a complete picture of protection.

3. Myth: “All coverage types apply to every job.”

Reality: Match the coverage to the work being performed. Specialized protections, such as pollution or professional liability, may only be relevant for specific trades. A certificate of insurance helps highlight the coverages that apply, ensuring contractors have the proper protection in place without unnecessary overlap.

What Should General Contractors Look For in a Certificate of Insurance?

For general contractors, a certificate of insurance is more than just paperwork; it’s a vital step in protecting projects from unnecessary risk. A certificate of insurance only provides a summary of coverage, so general contractors should confirm subcontractors meet contract expectations to reduce the risk of coverage gaps. Below are a few key items every general contractor should review to help ensure subcontractor coverage is valid, sufficient, and aligned with project requirements.

• Match limits to requirements: Confirm the subcontractor’s coverage meets or exceeds your policy requirements.
  
• Check for exclusions: Ask for a copy of the declarations page, a list of forms, or specific endorsements if something seems unclear.
  
• Verify authenticity: Some states now require additional insured forms are attached to insurance certificates due to fraudulent certificates. Request backup documentation when in doubt.

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Best Practices for Managing Project Certificates of Insurance 

Collecting certificates of insurance at the start of a job is a good first step. To stay compliant and audit-ready, contractors need a process for tracking, renewing, and storing these documents over time.

Best practices include:

Creating a Documented System: Larger firms often rely on third-party vendors or certificate management software to track expiration dates and automate reminders.

• Smaller businesses may not need that level of investment, but even a simple spreadsheet can go a long way. Setting reminders 30 to 60 days before a certificate of insurance expires helps ensure you’re not scrambling at the last minute. Staying ahead of expirations keeps projects compliant and prevents unnecessary disruptions.
  
• Keeping Records Ready for Audits: Insurance carriers may request certificates of insurance​​ during routine audits to confirm that subcontractors working on your projects are properly insured. Having organized certificates of insurance on file helps prevent delays, compliance issues, and unexpected premium charges.
  
• Designating Responsibilities: Collecting, renewing, and filing certificates of insurance is an ongoing task that can easily slip through the cracks if no one owns it. Assigning a point person—whether an accountant, office manager, or external service provider—creates accountability and consistency. When one person is responsible for monitoring certificates, contractors can be confident that nothing gets overlooked and all documentation stays current.

“You don’t just need certificates of insurance at the start of a job,” Booth explains. “You need them yearly at renewal, for audits, and even for taxes. Having a system in place helps ensure you’re covered and compliant.”

Pro Tip: Build a color-coded tracker in Excel or your management software that flags certificates 30 days before expiration.

The Central Difference

Trust is the foundation of every successful construction project. A certificate of insurance helps strengthen relationships by confirming proper protections are in place, setting accountability, and reinforcing critical partnerships. At Central, we understand how meaningful those connections are, and our agents work with you to ensure your certificate of insurance reflects accurate coverage and sets your next job up for success.

The strength of Central’s AM Best A (Excellent) rating backs that support. Our dedicated large construction team, responsive claims team, and specialized underwriting and loss control experts work together to protect contractors from complex risks and keep projects moving. With customer service that consistently outperforms industry benchmarks, you can count on us to deliver the same level of reliability and care you promise your clients.

Need a certificate of insurance for an upcoming project? Talk to your Central agent to get started.