Is There Really Insurance for the Project?


General contractors and project owners know the importance of securing general liability and worker’s compensation insurance certificates from subcontractors on projects. In fact, certificates of insurance are frequently obtained before the subcontractor’s work commences.

Is The Insurance Still Valid?

Simply producing a certificate of insurance does not mean that the insurance is still valid. Even if the certificate relates valid insurance, the policies may have expired or been cancelled after the certificate was generated.

Can You Rely Upon a Certificate of Insurance?

If the policy was cancelled, usually for non-payment, after the certificate was issued, the certificate is no longer valid. Although certificate holders are to be advised of policy cancellation, that does not always timely occur.

What Happens if the Insurance is No Longer Valid?

If the subcontractors’ insurance is no longer valid for any reason, the project owner or general contractor may become the legal employer of the subcontractors’ employees for worker’s compensation purposes, or even possibly exposed to liability claims generated by the subcontractor.

Make sure the Insurance Covers the Project.

Even if the insurance is valid, it must also cover the project for which the subcontractor is hired. Contacting the insurance company listed on the Certificate of Insurance to ensure the policies are still valid and that they cover the project can prevent serious issues from arising later on.

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