What is a valid workers compensation certificate of insurance?

Certificates of Insurance quite simply are insurance documents that make the world of insurance and construction go round! Securing a valid certificate of workers compensation insurance is critical for managing workers comp coverage and cost. You can learn more about certificates of insurance at our website.

Certificates of insurance do not convey coverage, modify policy documents or in anyway extend coverage from the policy. They simply provide notification to the certificate holder that on the date the certificate was issued to the certificate holder, coverage, as shown on the certificate, was in force for the named insured. Learn more about what a certificate of insurance cannot do.

Certificates have been a PIA for insurance agents, brokers, their clients and certificate holders! Certificate holders have, over the years, required more and more specific, detailed wording be added to the certificate. Most incorrectly think that if special wording is included on the certificate then that means they have special coverage. Not necessarily so! Remember, the certificate of insurance conveys no coverage, only the insurance policy can do that! So many certificate holders, while focused on the required special wording usually having to do with general liability coverage and additional insured status on the certificate, neglect to address the actual policy forms and endorsements required to modify the policy coverage. Over the years many of the issues surrounding certificates have been addressed, but this continues to be a problem area for agents, brokers, their clients and certificate holders. If you work in an industry that requires certificates of insurance, be especially vigilant, do your home work and make sure you secure valid certificates! OK…enough ranting…sorry about that!  

A valid certificate of insurance for workers compensation will show:

  • The effective and expiration date of workers comp coverage;
  • The name of the workers compensation insurance carrier;
  • Policy number;
  • Inclusion or exclusion of Owner, Partners, LLC Members and or Corporate Officers;
  • The subcontractor or independent contractor as the Named Insured;
  • The hiring party as the Certificate Holder.

Don’t forget about Employers Liability! It’s a separate coverage! Many employers fail to realize that most standard workers compensation policies not only provide coverage for state mandated workers compensation but also include employers liability coverage. As a matter of fact the standard workers comp policy is really titled “Workers Compensation and Employers Liability.” Because of this you’ll find on most certificates of insurance a section that identifies the employers liability limits which will be broken down and will be shown as:

  • Bodily Injury By Accident; With a limit provided per accident
  • Bodily Injury By Disease; With a policy limit provided
  • Bodily Injury By Disease; With a limit provided per each employee

Here’s a tip! If you work with independent contractors or subcontractors, make sure you obtain valid proof of workers compensation coverage, in the form of a valid certificate, that is effective for the time the work was performed and paid. If the work performed spanned multiple policy terms, make sure your certificates coordinate with those dates the work was performed and paid.

Who needs a certificate of workers compensation insurance? Generally if you are a hiring party, especially a contractor, and are using independent contractors and/or subcontractors to perform work for your business, then you should secure a workers comp certificate. This will provide you with proof of coverage. 

Keep in mind, proper certificate management will help you keep your workers comp costs under control! Why? Without a valid certificate providing proof of coverage from a sub you used, your insurance company will, at audit, charge you for the uninsured subs exposure! Learn more about how certificates effect the cost of your workers comp insurance at our website.

Hope this helps out! Thanks!