Certificates of Insurance

What is a certificate of insurance?

A certificate of insurance provides verification of insurance for contractors or subcontractors working with a company to provide information on specific insurance coverage. It may include the types and limits of coverage, the insurance carrier, policy numbers, name of the insured, and policy effective dates. 

Why is it important?

Workers’ compensation premium is usually based upon payroll. If a policyholder chooses to hire a contractor or subcontractor to perform work, the policyholder will be charged premium based upon the contract price unless the policyholder obtains and keeps a certificate of insurance verifying workers’ compensation coverage for each contractor or subcontractor hired to do the work. If a contractor or subcontractor hired to do the work has no workers’ compensation coverage and one of their employees is injured, the policyholder may be responsible for the workers’ compensation claim.

Recommendations:

• Obtain and keep copies of all certificates of insurance on any person/entity hired to do work and review them for the following:

1. The name listed on the certificate under the “insured” section exactly matches the name of the person/entity (including the LLC, Inc., LP or other designation) to whom you are making payment. 
2. Make certain that the name on the Workers’ Compensation Coverage Verification (WCCV) site matches the entity you are paying. 
3. If your company’s name and address is not listed as the certificate holder on the certificate of insurance, you should contact the subcontractor’s insurance agent and request that your company be added as the certificate holder. 

• Do not accept certificates of insurance directly from a subcontractor. Instead, obtain a certificate directly from the subcontractor’s agent. 
• Make sure that the subcontractor’s workers’ compensation insurance coverage remains active by checking the Workers’ Compensation Coverage Verification (WCCV) site.

See an example of a standard certificate of insurance form highlighting key areas you should review to verify the above-mentioned recommendations.

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Stay Informed: 

You can receive email notifications from the Louisiana Workforce Commission when an insurance policy is cancelled. To register for this free online Workers’ Compensation Coverage Verification (WCCV) service, visit this link and search for the policy. Once the policy is found, click on the name of the business and select “Track Policy”. Enter your email address to receive a verification email. Once you receive the verification email, select “Track Policy” and the subscription will be complete.

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