Workers’ compensation insurance allows you to take care of your employees if they are injured, and you rely on your subcontractors to provide that protection to their employees. Unfortunately, if you’re working with a new subcontractor you don’t know well, there’s a chance that certificate of insurance isn’t worth the paper it’s printed on, potentially leaving you liable for workplace injuries to their employees. Protect your finances by preventing subcontractor work comp fraud.
Verify the COI and Company
When you receive a subcontractor COI don’t file it away without a second thought. Make sure it’s on the ACORD 25 form, indicated on the lower left-hand corner. Nothing should be handwritten except the signature. Verify that the insurance company information is correct, that the company is legitimate and the company’s rating is an A on ambest.com.
Verify Active Coverage
Besides checking the policy dates on the COI, verify that coverage remains active. Audit your sub’s insurance regularly during a project and before releasing final payment. If necessary, contact the insurance company or ask to be a named insured so you’ll receive notice of cancellation.
Ask for the Policy
Finally, ask for a copy of the policy so you’ll have details on coverage levels and carveouts of which you need to be aware. Make sure the provisions you’ve required actually exist.
Blank COIs are easily available online. Make sure you aren’t the victim of subcontractor work comp fraud by taking an active role in insurance verification.