Court Rules in Favor of Insurer’s Right to Charge GC for Failing to Collect COIs from Subcontractors

What happens when your subcontractors fail to provide certificates of insurance (COIs) and then your insurance company finds out? They aren’t your employees, so you shouldn’t be on the hook for additional charges from your insurer… right? Not so fast.

An Indiana Court upheld an insurer’s right to collect additional insurance premiums from a local construction company on behalf of its subcontractors, citing the general contractor’s failure to appropriately manage risk by collecting COIs. The GC argued that as the workers were not their employees they had no liability for any injuries they might sustain.

However, the verbiage of the GC’s policy established the insurer’s responsibility to defend and compensate the GC for claims resulting from all liability assumed by the insured under state law. Since the GC failed to collect valid COIs from its subcontractors and therefore assumed liability for any potential coverage gaps, the insurer, by virtue of the policy terms, was exposed to additional risks as well and therefore sought to be compensated accordingly.

Takeaways from Alex Kario, Director of Operations at Jones

  • Secondary liability assumed by GCs on behalf of underinsured subcontractors is a costly risk. The GC in this case did an unsatisfactory job of managing this risk and protecting itself and its insurer from assuming secondary liability by not collecting compliant COIs from its subcontractors.
  • Worker’s Compensation laws vary by state and so do Worker’s Compensation insurance policies. For this reason, it’s important to consider the laws of the state where the work is to take place, not just the state where a contractor is domiciled.
  • Ensure you’re collecting COIs, or else you run the risk of potentially being charged higher insurance premiums. While this case isn’t applicable nationwide, it does set a precedent about the assumption of risk via COI non-collection that every property and project manager should know about.


At Jones we handle the COI collection and review process for leading CRE organizations like JLL, CBRE, Prologis, and more. We use a combination of technology and best practices to drive collection rates up, making the upload process simple and smooth for vendors, tenants and subcons alike. Read on here for more on how Jones can boost your COI collection rates over 90 percent, or reach out to us to talk about putting Jones to work for your organization.

Note: interested in exploring how Jones can help you automate your compliance management end-to-end and de-risk your building? Talk to our team of experts today!

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