If you work in the construction trades you may hire subcontractors, but did you know that your subcontractors may be costing you more than just what you pay for their work on the jobsite?
An uninsured subcontractor can greatly affect your loss exposure for General Liability and Workers Compensation policies, which will lead to an increased premium due. If the subcontractor does not carry insurance they will likely be classified as your employee, increasing the risk your business represents to your carrier. When there is no proof that your Sub has their own insurance, they by default become your responsibility and therefore your cost to insure.
The best way to avoid this from occurring is by having current Certificates of Insurance (COI) on file from all your subcontractors.
Here are some tips to help establish an internal policy to require COIs for every sub that does work for you.
 Notify all subcontractors up front that COI will be required before they start work
Coverage should be for Work Comp and Liability
(verify with your insurance agent if your policy has minimum coverage requirements)
Make sure that their insurance dates are current for the time frame they will be on your jobsite, and f/u on any expiring policies to obtain renewal.
Have COI specifically name your company as an additional insured. (A simple call by your sub to their insurance agent can accomplish this)
Make it mandatory across the board for all subs you hire. Even if you think that the sub is exempt, things change and you don't want to be the one paying the costs for unforeseen changes
Keep COIs in your records for at least 3 years ( a carrier can audit a policy up to 3 years after expiration)
Be prepared to provide COIs when your Premium audit is conducted. In order for sub contractors to be excluded from your premium audit, a COI is an absolute requirement . If certificates from subcontractors cannot be produced or are for the wrong coverages date, the cost of those subcontractors will be included in your audit and you will have an additional premium to pay as a result.
The presence of a Certificates of Insurance could save you thousands of dollars on your insurance premiums. After all it shouldn't be your responsibility to pay for someone else's insurance on top of what you are already paying for their services.