Certificate of insurance for contractors

No single figure applies everywhere; each GC writes its own. Three published examples show the range. Robertson & Olson's prequalification form asks for $1,000,000 each occurrence and $2,000,000 general and products aggregates on general liability, plus $1,000,000 auto and a $1,000,000 umbrella. Gramoll Construction's 2012 worksheet lists $2,000,000 each occurrence and $2,000,000 aggregate and points subs to the contract for specifics. Piazza Brothers' exhibit for a New York school project asks for $2,000,000 per occurrence and $4,000,000 aggregate on a per-project basis, a $10,000,000 umbrella, and both an ACORD 25 and an ACORD 855 for review. A small sub can be asked for anything in that span, and the only way to know is the exhibit for the job.

Two published rules give a GC reason to insist. The first is workers' compensation. Under Utah Code 34A-2-103(7), when a GC procures work from a sub, keeps supervision or control over it, and the work is "a part or process in the trade or business of the employer," the sub, "all persons employed by the contractor, all subcontractors under the contractor, and all persons employed by any of these subcontractors, are considered employees of the original employer." The same section lets the GC avoid that if it "obtains and relies on" a valid certification of the sub's compliance with the state's comp coverage section, or, for a sub with no employees other than its owner, partners or officers, a Labor Commission coverage waiver. The waiver cannot cover a crew.

The second is the GC's own premium. BITCO, a commercial carrier, tells its policyholders that "if you do not have a Certificate of Workers' Compensation Insurance for a subcontractor, we will include the payroll of the subcontractor's employees in the audit," and it includes the sub's payroll on general liability when there is no current certificate. State Farm says that without a certificate at audit, "the subcontractor's total cost may be added to your payroll."

It is the one-page ACORD 25, filled in. The insured box shows the sub's legal name and address; the producer box shows the agency; each policy row shows the carrier letter, policy number, effective and expiration dates, the ADDL INSD and SUBR WVD flags, and the limits; the certificate holder box at the bottom shows the GC's exact name and address, copied from its request. Above the policy rows the form prints that coverage is "subject to all the terms, exclusions and conditions of such policies" and that "limits shown may have been reduced by paid claims." A sample is a guide to layout, not a template to edit by hand.

The Description of Operations box is where requests go wrong. Utah's certificate statute says a certificate "may not refer to a contract that is not an insurance policy, including a construction or service contract," and UDOT's own instructions to consultants say "no specific contract/PIN/Project numbers or descriptions should be listed" there. If a GC asks for the project name or "per written contract" wording, note that whether a bare job reference crosses Utah's line is not settled by any source we found, so ask the agent before insisting. What the box can never do is add coverage the policy lacks.

Treat it as a gap to close before work starts, not a box to wave through. One fix is an umbrella or excess policy on top of the sub's primary limits. ConsensusDocs 750, a standard subcontract form, expressly allows it: required limits may be met "by a combination of underlying policies with the balance provided by an Excess or Umbrella Liability Policy." If the GC's exhibit requires additional insured or primary wording on the umbrella too, check that the umbrella actually carries it.

If the sub cannot buy the higher limit, the honest options are a written change to the subcontract accepting the lower figure, or another sub. Before agreeing, the GC should ask what its own carrier will do. BITCO, for its own audits, treats at least $1,000,000 per occurrence and aggregate, or the GC's own limits if lower, as adequate, notes that its underwriting uses different criteria, and says it will include in the audit "the payroll of any subcontractor whose General Liability Insurance does not meet the definition of 'adequate limits,'" and State Farm tells contractors to get certificates "with coverage limits equal to or greater than your limits."

What a GC cannot do is ask the agent to type a higher number. Utah law says a person "may not knowingly request or require the issuance of a certificate of insurance" that contains false or misleading information, and that duty binds the person asking as well as the agent. The fix lives in the policy, then the certificate follows.