EP246: How contractors can avoid costly insurance mistakes

Always collect Certificates of Insurance (COIs) from subcontractors BEFORE they begin any work to avoid liability and unexpected worker's comp costs.

Implement a robust system (e.g., cloud storage, calendar reminders) to track COI expiration dates for all subcontractors and ensure timely renewals.

Understand that worker's compensation premiums are often categorized by type of work; accurately break down your revenue by service to prevent overpaying.

Invest in a knowledgeable and proactive commercial insurance agent who specializes in your industry, rather than opting for the cheapest policy.

Regularly communicate with your insurance agent about business changes, such as new equipment, vehicles, or location shifts, to ensure continuous adequate coverage.

Never rely on a subcontractor's verbal assurance of insurance; always demand and verify physical documentation.

Be prepared for annual insurance audits by meticulously documenting all subcontractor COIs and revenue categorization for different services.