For small contractors, juggling daily operations, jobsite safety, and client expectations is already challenging enough — but overlooking the details in contracts and insurance certificates can cost far more than lost time. Whether you’re a general contractor, electrician, plumber, or remodeling professional, understanding how Certificates of Insurance (COIs) and indemnity clauses work can mean the difference between smooth operations and expensive legal disputes. At Skyscraper Insurance, we help contractors navigate the fine print, close coverage gaps, and build smarter contracts that protect their business from unnecessary risk.
Why Certificates of Insurance Matter
A Certificate of Insurance is a one-page document that verifies your business has active insurance coverage. It outlines the types of policies you carry — such as General Liability, Workers Compensation, Auto, and Umbrella — and includes details like policy numbers, coverage limits, and expiration dates. Most project owners, developers, and GCs require contractors to provide COIs before starting a job.
While it might seem routine, a COI is more than just paperwork. It’s a promise that you meet the project’s insurance requirements — and if something goes wrong, it’s your proof that you’re protected. Unfortunately, many contractors don’t realize that a COI does not extend coverage by itself. It’s only valid if the actual insurance policy matches what’s listed. If there’s a discrepancy, you could be left responsible for damages, even if you submitted a certificate on time.
Common COI Mistakes Contractors Make
- Incorrect or Outdated Certificates: Sending an expired COI or failing to update it after policy changes can delay project approvals or breach contract terms.
- Missing Additional Insured Language: Many contracts require that clients, GCs, or property owners be added as “additional insureds.” If this endorsement isn’t attached to your policy, your COI may not satisfy requirements.
- Failure to Include Waivers of Subrogation: Some contracts require your insurer to waive the right to recover costs from the client’s insurer after a claim. Without this waiver, you could be in violation of contract terms.
- Not Matching Coverage Limits: If your policy limits don’t meet the contract’s required minimums, your bid or payment could be delayed — or worse, rejected.
- Not Keeping COI Records: Always maintain a digital record of COIs issued to and received from subcontractors. You’re responsible for ensuring that anyone working under your license is properly insured.
Understanding Indemnity Clauses
Indemnity clauses — also known as hold harmless agreements — outline who takes financial responsibility if something goes wrong on a project. For example, a client may include language that makes you, the contractor, responsible for damages even if the client contributed to the problem. This can lead to major liability issues if your insurance doesn’t align with your contract.
There are generally three types of indemnity clauses:
- Broad Form Indemnity: Makes one party responsible for all damages, even if the other was partially at fault. Often unenforceable in many states.
- Intermediate Form Indemnity: Holds you responsible for damages you caused, as well as those you contributed to jointly.
- Limited Form Indemnity: Limits your responsibility to damages directly caused by your negligence.
Understanding which type is in your contract is critical. If your contract contains broad or intermediate indemnity, your General Liability Insurance may not fully cover those obligations. Reviewing these clauses before signing helps avoid taking on liability your insurance won’t pay for.
Why Small Contractors Are at Higher Risk
Large contractors often have in-house risk managers or legal counsel to review every contract. Small contractors usually don’t — which means important terms like additional insureds, waivers, and indemnity language can slip through the cracks. That’s where a knowledgeable insurance partner becomes essential.
At Skyscraper Insurance, we regularly help contractors spot hidden exposures in contracts and ensure that their coverage matches their obligations. We know that a small oversight can lead to denied claims or expensive legal battles, especially when working under larger firms that push strict requirements downstream to subcontractors.
How to Protect Yourself
1. Always Review Contract Insurance Requirements: Never sign a contract without comparing its insurance clauses to your existing coverage. Look for minimum limit requirements, additional insured wording, and waiver of subrogation terms.
2. Verify Subcontractor Coverage: If you hire subs, request their COIs and verify active policies. You can be held liable for their mistakes if they’re uninsured or underinsured.
3. Keep COIs Updated and Accessible: Store digital copies of all certificates and make sure they reflect current policy dates.
4. Use Endorsements Strategically: Add blanket additional insured endorsements where possible. They simplify compliance across multiple projects.
5. Partner with an Insurance Specialist: Work with a broker who understands construction contracts and can provide real-time COIs when clients request them.
The Role of Skyscraper Insurance
At Skyscraper Insurance, we work directly with contractors to simplify risk management. Our team provides fast certificate turnaround, customized policy wording, and contract review support to ensure your coverage truly matches your obligations. Whether you’re a small general contractor or a specialty tradesman, we make sure your insurance keeps you compliant and competitive.
We also help contractors integrate Workers Compensation, Commercial Auto, Builder’s Risk, and Umbrella Liability policies into one cohesive program — giving you the confidence to take on bigger projects with less stress.
Build with Confidence
Construction is unpredictable, but your protection shouldn’t be. Taking a few minutes to review your certificates and contracts today can save you thousands tomorrow. With the right coverage, documentation, and expert support, you can focus on building great work — not fighting paperwork or claims disputes.
At Skyscraper Insurance, we protect builders, innovators, and doers — the professionals who bring every project to life. Let us help you make sure your next contract is as strong as the work you deliver.
👉 Ask Us for a Contract/COI Check and find out if your coverage truly matches your agreements.
