Certificates of Insurance:  Frequently Asked Questions...

A certificate of insurance is a document used to provide information on specific insurance coverage. The certificate provides verification of the insurance and usually contains information on types and limits of coverage, insurance company, policy number, named insured, and the policies' effective periods.

Honestly, the certificate is only good for the day the certificate is issued. An agent/carrier can issue a certificate of insurance and the next day a cancellation notice could be processed by the carrier for non-payment of premium or other reasons. If it is for cancellation due to non-payment, the notice can be as short as 10 days.

The easiest way is to check on the Department of Insurance "Proof of Coverage" database. This provides information regarding workers' compensation coverage and exemptions from workers' compensation within the State of Florida. The link is posted here: Proof of Coverage Download Page (fldfs.com)

No, they cannot. While there are fees that insurance agents can charge under statute, charging for certificates of insurance is not one of them. It is a violation of subparagraph 626.9541(1)(o), F.S., which is illegal dealings in premium, excess or reduced charges.

If they are in the construction industry and have 1 employee, then "Yes", then the State of Florida requires them to have workers' compensation insurance.

However, that is not always what happens and your subcontractors ultimately... are your legal responsibility. If they do not have coverage, or their coverage lapses, then your workers' compensation will be forced to provide coverage (unless you are insured with a PEO - see FAQ under the PEO section.)

Also, if they do not have coverage, your insurance carrier will add the amount of any payments made to them, less materials, to your year-end audit and charge the appropriate additional premium.

To help you deal with your subcontractors, give WCA a call. We'll show you how to protect yourself from liability and additional costs.

We recommend that you do two things to verify coverage:

Prior to letting them on the job:

1. Request a Certificate of Insurance from the subcontractor.

2. Verify the coverage by looking up the policy on the Bureau of Compliance's website .

Click here to go to the Proof of Coverage database.

Prior to cutting each and every check to the subcontractor:

• Verify the coverage by looking up the policy on the Bureau of Compliance's website .

In this way, you can avoid most problems with fraudulent or expired certificates.

While we would like to trust everyone, issues present themselves more often than most people realize, and these steps will help you to protect your company.

You have coverage with a Professional Employer Organization (PEO) or as some call it a "leasing" company, and you provide a certificate of insurance to a contractor or customer that you are working for. They may come back and say that does not meet their requirements. Why?

When you have coverage with a PEO, they are only covering the employees that you have "reported to them" and "approved by them". That does not necessarily cover all of your "employees", or others that you would be responsible for. That is why they may balk at accepting the COI.

Specifically, they do not cover employees not reported, casual labor or uninsured subcontractors. This leads three potential uninsured scenario's in which the GC / Customer could/would be held responsible for injuries resulting from:

1. Injuries to employees that were hired, but not yet reported to the PEO.

2. Injuries to anyone being paid as casual labor, as they are not covered.

3. Injuries to a subcontractor, as they are not covered.

Coverage with a PEO is not the same "umbrella" coverage that a traditional policy written directly with a carrier would provide. Having your own policy provides much broader coverage to you and those you are working for. It provides coverage for:

1. Non-exempt owners/officers,

2. All Employees,

3. Casual Labor, and

4. Uninsured subcontractors.

If you have any questions about this, please do not hesitate to give us a call. We will be happy to explain this at greater length.