Certificates of Insurance for Contractors: Why Homeowners and Clients Must Verify Proof of Coverage

Gerald Burns
Oct 24
4 min read

A professional contractor standing beside a service van shows a homeowner their certificate of insurance on a clipboard, demonstrating proof of coverage before starting a job.

Hiring a contractor for a home renovation or business project can be exciting—but it can also expose you to legal and financial risk. One of the simplest ways to protect yourself is to insist on a certificate of insurance (COI) before work begins. This document, also called a contractor certificate of insurance or proof of insurance, confirms that the contractor carries active general liability and, if required, workers’ compensation insurance. Skipping this step can leave homeowners and clients liable for injuries, property damage or even lawsuits.

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Why a Certificate of Insurance Matters

Low bids from contractors sometimes indicate cut corners—especially on insurance coverage. If a worker is injured or accidentally damages your property, an uninsured contractor can leave you paying the bill. Even if a contractor verbally assures you that they are “insured and bonded,” you need to see proof. Your homeowners or business insurance may not cover all costs, and uninsured accidents can easily exceed typical liability limits (often $100k–$300k for homeowners policies).

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🧠 Did You Know

Nearly 40 % of small contractors in the U.S. operate without proper insurance verification, exposing homeowners to potential lawsuits if an accident occurs.

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What to Look for on a COI

A standard ACORD 25 certificate lists the contractor’s business name and address, the insurance agent or broker, the insurer’s name, policy numbers, coverage limits, and the policy’s effective and expiration dates. It should clearly state general liability coverage and workers’ compensation insurance. Some contractors carry additional coverage—such as builder’s risk insurance for new construction or professional liability insurance for design work. Always ensure the COI lists the type of coverage relevant to your project.

Key details to verify:

Current coverage dates: Expired policies offer no protection.
Coverage limits: Many experts recommend at least $1 million in liability coverage.
Workers’ compensation: This insurance covers medical expenses and lost wages if a worker is injured.
Products and completed operations: This endorsement covers claims arising after work is finished.
Certificate holder: Your name or business should appear in this section.

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How to Verify a Certificate of Insurance

Ask for a COI: Request it before signing a contract. The contractor’s agent should send the certificate directly to you.
Compare names: Ensure the contractor’s legal business name matches the certificate.
Confirm coverage: Look for general liability and workers’ compensation insurance. For high‑risk projects, ask about additional coverages.
Check policy dates: Make sure the policy is active throughout your project.
Call the insurer: Use the phone number on the certificate to confirm the policy’s status. Do not rely solely on the contractor’s word.
Watch for red flags: Refusal to provide a COI, mismatched names, expired dates or missing endorsements are warning signs.

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Other Protections to Consider

A COI is just one part of protecting yourself:

Written contracts and licenses: Always have a written agreement detailing the scope of work and confirm any required contractor license.
Builder’s risk and fidelity bonds: For large projects, builder’s risk coverage protects materials and structures during construction, while fidelity bonds can offer limited protection against employee theft.
Secure valuables: Even with bonds, it’s wise to lock up or remove valuables when contractors are on your property.
Professional presentation: Contractors who invest in proper signage, organized paperwork, and clear communication show they take risk management seriously. For small-business contractors, services like Super Cheap Signs can help create professional job-site signage. Entrepreneurs launching new ventures can use platforms like ZenBusiness to form LLCs and stay compliant.

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Need proof your business is legit?

Form your LLC quickly with ZenBusiness and get your compliance docs ready before clients ask.

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🧠 Did You Know

Insurance carriers often reward businesses that keep organized safety and compliance records with lower premiums — clean paperwork can literally save you money.

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FAQ: Certificates of Insurance and Hiring Contractors

What information should a certificate of insurance include?

It should list the insured contractor’s name and address, the insurance agent or broker’s contact information, the insurer, policy numbers, coverage limits, effective and expiration dates, and the types of coverage (e.g., general liability, workers’ compensation).

Who issues a COI, and who should receive it?

The contractor’s insurance agent or broker issues the certificate. The homeowner or client (you) should be listed as the certificate holder and receive it directly from the agent.

How do I verify that a certificate is genuine and current?

Check the dates and coverage limits, then call the insurer listed on the certificate to confirm that the policy is active. If anything looks suspicious, ask for an updated document or choose another contractor.

Do I need a new certificate for each project?

Yes. Certificates are tied to specific policy periods and may include project details. Always request an updated COI before starting any new work.

What if a contractor refuses to provide proof of insurance?

Declining to provide a COI or making excuses is a red flag. Consider this a sign to hire someone else. Uninsured contractors can leave you liable for injuries or property damage.

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