What is a Certificate of Insurance (COI) in construction?

A Certificate of Insurance (COI) is a one-page document — almost always the ACORD 25 form — that summarizes a party's insurance: the policy types, limits, effective dates, insurer, and named insured. General contractors collect a COI from every subcontractor as evidence that the sub carries the coverage the contract requires. Important: a COI is informational only. It proves coverage existed at a point in time but does not itself bind coverage, amend the policy, or create additional insured status — only the endorsements attached to the underlying policy do that.

How do I become an additional insured on a subcontractor's policy?

You become an additional insured by being added to the sub's policy through an endorsement — not by a note on the COI. Specify the exact ISO endorsement forms in your subcontract and your COI request: CG 20 10 for ongoing operations and CG 20 37 for completed operations. Then request copies of the actual endorsement pages and confirm they name your legal entity. An "additional insured per contract" notation in the COI's Description of Operations box is not binding on the insurer; the endorsement must be attached to the policy.

What does 'Primary & Noncontributory' (PNC) mean?

Primary and noncontributory (PNC) means the subcontractor's insurance must respond first (primary) and without seeking contribution from (noncontributory) your own insurance. Without it, in a covered loss both insurers can argue the claim should be shared — delaying resolution and eroding your own policy limits. PNC is created by an endorsement such as CG 20 01 on the sub's general liability policy and should be required in your subcontract.

What is a Waiver of Subrogation?

A waiver of subrogation is an agreement in which the sub's insurer gives up its right to sue a third party — typically the GC or owner — to recover money after it pays a claim. In construction, GCs require each sub to carry a waiver in their favor on all required lines, including workers' compensation. The waiver must be in place before a loss occurs and is established by endorsement (for example, CG 24 04 on the GL policy).

What is a workers compensation premium audit?

A premium audit is an end-of-policy-year review by the workers' comp (and sometimes GL) insurer to calculate the actual premium owed, based on verified payroll, subcontractor payments, and classification codes — replacing the estimate used to start the policy. For GCs, the audit is where missing sub COIs become expensive: if you cannot produce a valid certificate for a sub, the auditor can roll that sub's payroll into your policy at a higher class rate, sharply increasing your premium.

What is Experience Modification Rate (EMR) and why does it matter?

EMR (Experience Modification Rate) is a multiplier — expressed as a decimal like 0.88 or 1.12 — that adjusts a contractor's workers' comp premium based on its actual loss history versus the industry average. 1.0 is average; below 1.0 earns a discount; above 1.0 means higher premiums. It is calculated by NCCI or a state rating bureau from three years of audited losses (excluding the most recent year). EMR matters because many owners and GCs will not let a sub on site unless its EMR is below a stated threshold — it is used as a safety prequalifier, not just a pricing factor.

Construction Risk Glossary & FAQs: COIs, Subcontractor Insurance, and Workers' Comp Audits

Construction Risk Glossary A–Z

Precise definitions of the terms you will encounter in construction contracts, COIs, and insurance audits.

Why endorsement edition dates matter

The same form number can provide very different coverage depending on its edition date. For example, CG 20 10 11 85 is widely considered unacceptable because it can extend coverage to the additional insured's sole negligence, while the 04 13 and 12 19 editions are preferred for their appropriate limitations. Always confirm the full form number including the edition date (e.g., CG 20 10 04 13, not just CG 20 10).

Jump toA B C E G P S U W

ACORD 25: The standard Certificate of Liability Insurance form issued by ACORD (Association for Cooperative Operations Research and Development). It summarizes an insured's liability coverages but is informational only and does not amend policy terms, create additional insured status, or guarantee coverage. Endorsements attached to the underlying policy control actual rights.
Additional Insured(aka AI): A party other than the named insured who is granted coverage under another party's insurance policy via endorsement. In construction, general contractors and property owners typically require additional insured status on subcontractors' general liability policies. The specific endorsement form determines the scope and duration of coverage. CG 20 10 for ongoing operations and CG 20 37 for completed operations are the standard forms.
Auto Liability: Insurance covering bodily injury and property damage caused by vehicles used in connection with business operations. Construction contracts typically require a minimum combined single limit (CSL) of $1,000,000. Hired and non-owned auto coverage (HNOA) extends protection to rented vehicles and employees using personal vehicles for business.

Builder's Risk: Property insurance covering a building or structure under construction against physical damage (fire, wind, theft, vandalism) during the construction period. It typically covers materials on-site, in transit, and temporarily stored off-site. Builder's risk is usually procured by the property owner or GC and is specified in the AIA contract documents. It is distinct from general liability and does not cover third-party bodily injury.

Certificate of Insurance(aka COI): A document summarizing a party's insurance coverage, including policy types, limits, effective dates, insurer, and named insured. The standard construction form is ACORD 25. Certificates are evidence of coverage at a point in time but do not bind coverage or create rights. They may be issued by the insurer or broker.
CG 20 10: An ISO endorsement form that grants additional insured status on the named insured's commercial general liability policy for liability arising out of ongoing operations. CG 20 10 covers the period when active work is in progress but does not extend to completed operations claims; those require CG 20 37.
CG 20 37: An ISO endorsement form that extends additional insured coverage to completed operations, covering liability arising from work after it has been finished and the job site has been turned over. Without CG 20 37, a GC's additional insured status expires when work ends, leaving no coverage for latent defect or post-completion injury claims. This is one of the most commonly missing endorsements on construction COIs.
Completed Operations: The portion of general liability coverage that applies to bodily injury or property damage arising from work after it has been completed and the job site turned over to the owner. Completed operations claims are common in construction (e.g., a defectively installed roof that leaks two years post-completion). Separate AI endorsement CG 20 37 is required to maintain additional insured status into the completed operations period.

EMR(aka Experience Modification Rate): A numerical multiplier (typically expressed as a decimal, e.g., 0.88 or 1.12) that adjusts a contractor's workers' compensation premium based on their actual loss history compared to the industry average. An EMR of 1.0 is average; below 1.0 is better-than-average; above 1.0 reflects more-than-average losses and results in higher premiums. Calculated by NCCI or a state rating bureau based on three years of audited loss data, excluding the most recent policy year. Many project owners and GCs require subs to maintain an EMR below a specified threshold.
Endorsement: A written document attached to an insurance policy that modifies the policy's terms by adding, removing, or limiting coverage. Endorsements are the legal mechanism that creates additional insured status, establishes primary and noncontributory obligations, and grants waivers of subrogation. A COI notation is not an endorsement; only a document attached to the underlying policy controls coverage.

General Liability(aka CGL): Commercial General Liability insurance covering bodily injury, property damage, personal injury, and advertising injury arising from the insured's operations. The standard construction CGL policy includes both occurrence-based coverage and products/completed operations coverage. Minimum limits in most construction contracts are $1,000,000 per occurrence / $2,000,000 aggregate, though higher limits are frequently required.

Premium Audit: An end-of-policy-year review conducted by a workers' compensation (and sometimes GL) insurer to determine the actual premium owed based on verified payroll, subcontractor payments, and classification codes, as opposed to the estimated premium used to initiate the policy. Missing sub COIs during a premium audit may cause the insurer to absorb those subs' payroll into the GC's policy at a higher classification rate.
Primary and Noncontributory(aka PNC): A contractual and endorsement requirement that a subcontractor's insurance respond before (primary) and without contribution from (noncontributory) any other insurance the upstream contractor or owner carries. Without PNC, both insurers could argue the loss is shared, delaying resolution and reducing each party's coverage. Established through an endorsement such as CG 20 01 on the sub's GL policy.

Statutory Employer: A legal doctrine in workers' compensation law that holds an upstream contractor liable for the workers' compensation obligations of an uninsured or underinsured subcontractor. If a sub's employee is injured and the sub has no workers' comp coverage, the GC may be required to pay those workers' comp benefits under the sub's statutory employer provisions of state law. Florida Statute 440.10 and North Carolina General Statute 97-19 are notable examples.

Umbrella / Excess Liability: A policy that provides additional liability limits above the underlying general liability, auto liability, and employers liability policies. An umbrella policy may also broaden coverage in some areas; an excess policy simply adds limits with no coverage changes. Construction contracts commonly require $1,000,000 to $10,000,000 in umbrella/excess coverage, depending on project size and risk.

Waiver of Subrogation: An agreement by an insurer to waive its right to sue a third party (e.g., the upstream GC or owner) after paying a claim on behalf of the named insured. In construction contracts, the GC typically requires each sub to include a waiver of subrogation in favor of the GC and owner on all required policies. Waivers must be in place before a loss occurs and are established by endorsement (e.g., CG 24 04 for GL).
Workers' Compensation: Mandatory insurance in most states that pays medical expenses and lost wages to employees injured on the job, regardless of fault. For GCs, workers' comp risk includes both direct exposure (your own employees) and statutory employer exposure (uninsured subs whose injured workers may become your liability). Policy premiums are audited annually based on actual payroll and classifications.

Construction Risk Glossary & FAQs

Quick Answers: Construction Insurance FAQs

How to Collect and Verify a Subcontractor COI

Define your minimum insurance requirements before sending the request

Send a COI request with specific instructions

Review the ACORD 25 certificate field by field

Request and verify the actual endorsements

Verify workers compensation covers all workers on the project

Store the COI and set expiration tracking reminders

Construction Risk Glossary A–Z

Red Flags: Common COI Problems to Catch Before Work Starts

Expired policy dates

Missing CG 20 37 (completed operations AI)

Named insured does not match the contract

Limits below contract minimums

No primary and noncontributory endorsement

Additional insured noted on COI but no endorsement provided

Workers’ comp excluded or not listed

Waiver of subrogation missing on workers’ comp

State-Specific Notes: Statutory Employer and Audit Rules

Florida

North Carolina

Texas

California

Sample Contract Language: AI, PNC, and Waiver Requests

Additional Insured (Ongoing and Completed Operations)

Primary and Noncontributory

Waiver of Subrogation

Stop Managing COIs in Spreadsheets