Workers’ comp insurance is a must-have for small business owners and subcontractors. It provides duo protection for your business and employees against potential work-related risks. There are many components to workers’ compensation insurance, but one of the most important parts to be aware of is your workers’ compensation certificate of insurance. 

 

A workers’ compensation certificate of insurance is proof that a business carries workers’ comp coverage. It can sometimes be referred to by other names, including COI, insurance certificate, certificate of insurance form, subcontractor certificate of insurance, or proof of insurance. 

 

In this article, we’ll explore the basic foundations of workers’ compensation certificates for subcontractors, including:

 

  • What is a certificate of workers’ compensation? 
  • Who needs a COI? 
  • When do subcontractors need to provide a workers’ compensation certificate?
  • Where and how do subcontractors get an insurance certificate? 
  • Why is having worker’s comp insurance a wise (and necessary) decision for your business? 

 

What is a workers’ compensation certificate of insurance?

 

A workers’ compensation certificate of insurance is an official form showing proof of workers’ comp insurance coverage. This certificate is issued by an insurance provider and must be stored securely by the business. 

 

It lists important details, including the names of the insurer and policyholder, policy period, type of insurance provided, policy number, and effective dates of coverage. This proof of workers’ compensation can be referred back to by all parties to confirm insurance details. 

 

Who needs to have a workers’ compensation certificate?

 

Some small business owners mistakenly believe they don’t need to carry workers’ compensation insurance, especially if they only have a few employees in low-risk jobs. Regardless of a company’s size or type of business, if it doesn’t have the legally required workers’ comp coverage for its employees, it can face fines, penalties, and even imprisonment depending on the state’s laws and regulations.

 

If you’re a subcontractor or independent contractor, you may or may not be required by law to have a workers’ compensation policy for yourself and your employees. This depends on the workers’ compensation laws in your state. You can contact the workers’ compensation official in your state to learn about how your state laws impact the structure of your business. 

 

Be aware that even if you are not legally obligated to have a workers’ compensation policy, companies you do business with, such as suppliers or clients, may insist that you have coverage. It is common for companies to ask that you provide them with your workers’ compensation certificate before a contract is signed. 

 

Most general contractors and other companies that employ skilled workers need workers’ comp insurance. If you’re a subcontractor or independent contractor that does business with other companies or government entities, you will likely need a certificate of workers’ compensation, too. 

 

When do subcontractors need to provide a workers’ compensation certificate?

 

If you’re a subcontractor or independent contractor, you may need to provide a workers’ compensation certificate when you enter into a contract with another company. You may also need to show your workers’ comp certificate prior to performing work for a government entity.  

 

On the flip side, if you have another subcontractor or independent contractor working for you, you should request a workers’ comp certificate from them to prove to your insurance company that they are covered through their own policy.

 

How can subcontractors get a workers’ compensation certificate?

 

To get a workers’ compensation certificate, you’ll first need to have a workers’ comp insurance policy. 

 

The type of insurance depends on the workers’ compensation laws in your state. You may be able to get workers’ comp insurance from a private insurance company, through a state-funded system, or through self-insurance (if you have the resources available). 

 

Once you have a workers’ insurance policy, you can get proof of workers’ compensation from your insurer.

 

Where can subcontractors get workers’ compensation insurance?

 

Not all insurance providers cover subcontractors or independent contractors. Your best bet is to start with an insurance company that caters to small businesses. Follow these three steps to begin finding the best workers’ compensation insurance company that fits your specific needs:

 

  1. Look up the workers’ compensation requirements in your state.
  2. Identify what you’ll need to obtain a workers’ compensation estimate.
  3. Get a workers’ compensation quote in just a few minutes.

 

In addition to focusing on insurers that provide options specific to small businesses, look for companies that offer fast online quotes, competitive pricing, highly-rated insurance, and have received industry accolades. 

 

If you need more guidance on choosing a worker’s comp policy provider, check out our resources on how to find the best workers’ compensation insurance for your company, as well as how to prepare for getting a workers’ comp quote.

 

Why is having workers’ compensation insurance the best choice for subcontractors?

 

Having workers’ compensation insurance is a wise (and necessary) business decision for subcontractors and independent contractors for several reasons. You may need to get workers’ compensation coverage if:

 

  1. Your state laws require it.
  2. A general contractor or other business requires it.
  3. You want to reduce your liability and protect your business assets.
  4. You use other subcontractors, leased employees, or independent contractors.

 

If you work as an independent contractor for another company, you won’t be covered under their workers’ compensation insurance policy. Therefore, if you’re injured on the job, you likely will not receive workers’ compensation benefits from your employer. That means you won’t receive any payments for medical bills, lost wages, or rehabilitation services.

 

In many cases, if you don’t have your own proof of workers’ comp, other companies won’t be willing to take on the liability of having you perform contract work for them. Some companies, especially those in the construction industry, will not even consider signing a contract with you until you show them your proof of worker’s comp insurance. Having a workers’ compensation certificate ensures you don’t miss out on potential contracts or partnerships. 

 

Whether you call yourself an independent contractor, freelancer, “solopreneur,” or subcontractor, workers’ comp insurance can help shelter you from an unpredictable storm. A certificate of workers’ compensation will give you the security of knowing you will have help with medical bills, lost wages, or rehab benefits if needed. 

 

If you’re interested in learning more about workers’ compensation, see our Workers’ Comp 101 resource section.

 

Workers’ comp insurance made easy

 

If figuring out workers’ compensation insurance seems overwhelming, you’re not alone. Pie Insurance can help. We’ve taken the guesswork out of the process and we’re passionate about providing workers’ comp insurance for small businesses across the country. 

 

 


Thanks for reading! Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation insurance or check your current rate in 3 minutes.

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