My liability insurance companies audit methods seem unfair or at the least unforgiving. As many of your know our service regions are often very large and we often take in many remote sub-contractors to handle remote jobs. It's often not possible to get a new sub-contractors insurance certificates before they begin work. Then after the fact the sub-contractor is unwilling to provide a copy unless additional work is available. Then at the end of the year you get audited and get charged for all your paid out revenues for your sub-contractors that your unable to provide insurance certificates. Also, with some carriers you get also charged an audit premium for paid out material and equipment costs to sub-contractors. If you have had similar experience please contact me off-line. Some of this possibly is an unfair business practice on-part of the insurance carriers.

There is nothing unfair about what you explain as to the GL insurance audit. This has been standard insurance practice since I can remember when I first started in business back in 1977 as a GC. The GL company is only covering their exposure to risk that you created because you failed to get the vendor certificate of insurance prior to awarding the work to them. It may be ahard lesson to learn but if there no vendor Acord form of current insurance coverage there is no award of work. Those vendors who refuse to give you the Acord form until there is more work probably have no insurance to begin with. If you don't have a W9, confidentiality and independant contractor agreement signed with each vendor allowing you to withold for no insurance then thats your fault too.

Sounds like a Catch-22 !

The Subs won't (or can't) get their own Liability Insurance until they are assured of a steady supply of work from you.

And you can't really assure the Subs of a steady supply of work until they provide evidence of their own Coverage.

So in the meantime, your own Carrier will transfer the additional perceived risk exposure to you, and charge you accordingly.

What about Workers' Compensation? In the event of one of the Subs being injured on the job, is the Sub covered? . . . . or will their injured Employee come looking for you or your Client ?

What about Workers' Compensation? In the event of one of the Subs being injured on the job, is the Sub covered? . . . . or will their injured Employee come looking for you or your Client?


the sub's employer should have liability.

you don't hire them until you have the insurance certificate in hand. it certainly is possible, though the sub may not be willing or able to provide it in advance.