3 hidden risks of non-compliance

Fraudulent or Fake Certificates

Hidden Risk:
Some subcontractors fake or manipulate COIs to appear insured when they aren’t. This is a growing issue, especially with Photoshopped COIs or outdated forms.

 Example:
You receive a COI from a subcontractor, but later, an incident occurs. When you contact the insurance company, you find out the policy never existed—the subcontractor forged the document to secure the job.

 Prevention:

• Always verify COIs directly with the insurance carrier.
• Use COI tracking services that confirm policy validity.

Require certificates to be sent directly from the insurance agent, not the subcontractor.

Subcontractor’s Insurance  Canceled Mid-Project

Hidden Risk:
A COI only proves that insurance was in place on the day it was issued—it doesn’t guarantee continuous coverage. If a subcontractor misses a payment, their policy can be canceled mid-project, leaving you unknowingly exposed.

 Example:
Your subcontractor starts work with valid insurance, but fails to pay their premium a month later. An accident occurs, and when you file a claim, you discover their insurance was canceled weeks ago—leaving you with no coverage and full liability.

Subcontractor’s Policy Has Exclusions That Leave You Exposed

Hidden Risk:
Many contractors assume that if a subcontractor provides a COI, they are fully covered. However, exclusions in the policy can leave you liable.

 Example:
You hire a subcontractor for roofing work, and they give you a COI that shows general liability coverage. Later, an accident occurs, and you discover their policy has a roofing exclusion—meaning their insurance doesn’t actually cover roofing work. Now, you are financially responsible for the claim.