The certificate of insurance your contractor is being asked for

A contractor calls the office on a Thursday. He has been told he cannot start on Monday without a certificate, he is not entirely sure what is being asked for, and the general contractor's office has sent a requirements sheet he has read three times. This happens often enough that it is worth writing down what is actually going on.

Why the general contractor cares

When a general contractor puts a subcontractor on a site, the subcontractor's work becomes part of the general contractor's exposure. If something a subcontractor does causes injury or damages property, the claim can reach upward. Requiring evidence that each trade on the site carries its own cover is how that gets managed, and it is why the requirement is usually absolute rather than negotiable. On most sites, no certificate means no access.

The two things usually being asked for

The first is commercial general liability, which responds to bodily or personal injury and property damage arising out of your operations, your products or your employees. That is the cover for the case where a client's floor is damaged, a passerby is hurt, or work you completed causes a problem later.

The second is workers' compensation, which covers your own people. Medical expenses, lost wages, rehabilitation and death benefits for an employee injured or made ill on the job. Many requirements sheets ask for both, and some ask for additional items on top depending on the scope of the work.

What tends to go wrong

• The certificate arrives with the wrong entity named. It has to match the business as it is actually contracted, not a trading name or the owner's personal name.
• The limits on the certificate are lower than the requirements sheet asks for.
• The requirements sheet asks for the general contractor to be added as an additional insured, and nobody has arranged that.
• The policy expires partway through the job and nobody notices until the renewed certificate is chased.
• The classification on the policy does not match the work being done, which is a problem that only surfaces at claim time.

Almost all of these are avoidable, and almost all of them are found by reading the requirements sheet against the policy before the certificate is issued rather than after it is rejected.

Have these ready before you call

The legal name of your business and how it is set up. What trade you actually perform and the kind of sites you work on. Roughly how many people work for you and whether they are employees or subcontractors, because that changes the workers' compensation conversation. Your annual revenue or payroll, approximately. And the requirements sheet itself, because the limits and the additional insured wording are on it and they differ from one general contractor to the next.

If you are chasing a start date, say so at the start of the call rather than at the end of it. Timing changes what can be arranged and in what order.

It is not only construction

The same requirement lands on electricians, painters, plumbers and landscapers, and increasingly on anybody working on a commercial property under a contract. Property managers, retail landlords and municipalities ask for it too. If somebody is letting you onto property they are responsible for, expect to be asked to prove you are insured.

Where we come in

True Way writes contractor general liability and workers' compensation, along with bonds including license and permit bonds, from the office at 8029 Lankershim Blvd in North Hollywood. Bring the requirements sheet. The office is open until 8pm on weekdays and until 2pm on Saturday, which is deliberately late, because this call almost never comes in at ten in the morning.