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A subcontractor emails you a certificate of insurance the week before work starts. You save it to the job folder, and insurance stops being something you think about. Across the top of that form it says it was issued for information only and gives the person holding it no rights.

An insurance certificate is evidence that a policy existed on the day an agent typed it up. It does not put your company on that policy, it does not promise the policy will still be in force next month, and it is not an agreement between you and the insurance company.

Your company's name in the certificate holder box means somebody sent you the document. Coverage for your company under your subcontractor's policy comes from an endorsement, a change the insurance company makes to the policy. The certificate has a box claiming you are now an additional insured, and a space where an agent can type the same claim in longhand. Neither is the endorsement. Ask to be sent the endorsement.

Look at how it adds you. Some name your company. Others are blanket forms covering whoever your subcontractor agreed in writing to cover, which puts the weight back on your subcontract.

Then check which claims it reaches. One kind covers you while your subcontractor is doing the work. A second covers claims that surface after the work is finished, which the industry calls completed operations. The leak that shows up eight months after the crew packs up is the second kind, and an agreement that asked only for the first gives the carrier room to turn that claim down. Put both phrases in the subcontract, ongoing operations and completed operations, and ask for the endorsement covering each. Our earlier piece, Protect Your Profit Before Work Starts, covers the rest of what belongs in that agreement.

Policies get canceled for nonpayment, and nothing on the certificate promises that anyone will tell you. The paper keeps looking current long after the coverage stopped.

Florida offers a fix that almost nobody uses. If you would be the one responsible for that crew, you can register in writing with your subcontractor's workers' compensation insurer, and the insurer then owes you written notice if the policy is canceled or not renewed. One letter, and the news comes from the insurance company rather than from an injury.

Put the expiration date on your calendar for the same reason. When a job runs past the end of the policy period, Florida expects you to collect current proof, and the certificate from the spring says nothing about a crew working for you in July. Our earlier piece, Vendor Contracts and the Auto-Renewal Plague, covers what happens to paper you sign, file, and never put a date on.

Hire a subcontractor to handle part of a job you have taken on, and the State puts the coverage question on you: if that subcontractor does not carry workers' compensation for its employees, those workers become your employees. An injury turns into your claim, and the state can order you to stop work and calculate a penalty against you that counts the uninsured subcontractor's payroll as though it were yours.

Know which subs are supposed to carry coverage. In construction, one employee triggers the requirement, and owners count toward it. Outside construction, the number is four, counting corporate officers and LLC members.

What protects you is the file. Before the sub starts, collect the information page from the sub's own policy, or a printout from the state's public coverage lookup showing the policy in force, or a certificate paired with written confirmation from the agent or the insurer that coverage is in effect. A certificate on its own does not satisfy Florida. Something from the agent or the carrier has to sit behind it.

A corporate officer can carry an exemption instead of coverage. Keep a copy of the exemption certificate, or a printout from the state's exemption lookup, and check that the dates cover your job and the industry listed matches your work. If that sub has an exempt officer and also has employees, you need the exemption and proof of coverage for the crew.

Collect all of it and the stop-work order goes to your subcontractor rather than to you, so long as your own people are covered.

This costs money at renewal even when nobody gets hurt. When your carrier audits your policy, what you paid a subcontractor who cannot be shown to have carried coverage can be treated as payroll and priced that way. An expired certificate, or one canceled partway through the job, can land the same as no certificate at all.

So, before the next crew shows up, the folder needs the endorsement covering your company for ongoing and completed operations, workers' compensation proof in one of the three forms above, the expiration date on your calendar, and a copy of the letter asking your sub's insurer to notify you if the coverage stops. The first three establish where you stood the day the work began. The letter is what tells you when that changes.

The Co. Letter is not your attorney or your insurance agent. This article is general information, not legal advice, and reading it creates no attorney-client relationship. Policy language and coverage requirements vary by policy, by carrier, and by state. Consult a licensed attorney and your insurance agent about your own agreements and coverage.

Have an interesting business question and need a free bit of advice? Send your question to [email protected]. No confidential info, please!