Glossary  /  Contractors

Certificate of insurance

Also called COI, cert of insurance

A certificate of insurance is a document showing that a subcontractor carried their own workers' compensation coverage, and it is the evidence that keeps payments to them out of the hiring business's payroll at audit.

For premium audit purposes the certificate has to show workers' compensation coverage in the subcontractor's own name and cover the dates the work was actually performed.

Two failures account for most problems. A certificate collected long after the fact says nothing about whether coverage existed at the time, and a policy that lapsed mid-project leaves everything after the lapse date uncovered.

Why it matters at audit

Collecting certificates at hire rather than at audit is the cheapest risk control available in premium audit, and the one most often skipped.

Related terms

  • Uninsured subcontractorAn uninsured subcontractor is anyone paid for work who cannot show they carried their own workers' compensation coverage, and whose payments most states therefore allow a carrier to treat as the hiring business's payroll.
  • Premium auditA premium audit is the review a workers' compensation carrier performs at the end of a policy period to replace the estimated payroll the policy was priced on with the payroll the business actually paid.

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Back to the premium audit glossary