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R&R Insurance Blog

Hiring Subcontractors: Why Certificates are a Must

Posted by Julie Liebelt

Subcontractors-on-the-jobAn uninsured subcontractor can increase your exposure to liability and workers compensation claims, affect your experience modification factor and increase your premium. If the subcontractor does not carry insurance, your policy could respond in the event of a claim. An uninsured subcontractor will be considered to be your employee.


The insurance company’s auditor will ask for both payroll and 1099 records in order to determine final premium. If certificates from subcontractors cannot be produced, the cost of those subcontractors will be included in your audit.


Some tips for a successful certificate management program:

  • Advise subcontractors up front that certificates will be required
  • Ensure that dates on the certificate align with the length of time they will be on the project. If the project goes longer, ask for a renewal of the certificate
  • The certificate must show evidence of both general liability and workers compensation insurance
  • Don’t allow for exceptions, even if the subcontractor claims to be exempt from the workers compensation requirement (sole proprietor, no employees, etc.)
  • Your R&R agent can assist you in setting up specific insurance requirements concerning limits and policy provisions designed to protect you such as:
    • Additional insured status
    • Primary and non-contributory insurance
    • Waiver of subrogation

We urge you to require your subcontractors to be insured and to furnish a certificate of insurance as proof. Click here to download a copy of this blog.


R&R Insurance Services is pleased to provide this information to you as a guide. It is intentionally condensed. For a thorough explanation of these and other terms, and if applicable in your situation, please contact your Knowledge Broker.

Topics: Certificates of Insurance, Business Insurance, certificate of insurance, subcontractor