Subcontractor insurance glossary: COI and workers' comp terms for contractors

Short, plain-English definitions of the terms that come up when a general contractor collects certificates of insurance and other documents from subcontractors. These are general descriptions; policy wording, contracts and state rules can differ, so your insurance agent or attorney is the authority for your situation.

Certificates of insurance

ACORD 25

The standard one-page "Certificate of Liability Insurance" form used across the US insurance industry to summarize a business's liability policies. See how to read an ACORD 25.

Certificate of insurance (COI)

A one-page summary of a business's insurance policies, usually issued by its insurance agent, listing the insured, the insurers, each coverage type with its policy number and dates, and the limits. It's provided for information only and doesn't change the policies. See subcontractor certificates of insurance.

Certificate holder

The person or business a certificate of insurance is issued to, often the general contractor or project owner requesting it.

Insured (named insured)

The business the insurance policies are written to, shown near the top of a certificate.

Producer

The insurance agent or broker who issued the certificate. Often the quickest contact for a renewal.

Effective date

The date a policy's coverage starts, shown for each coverage line on a certificate.

Expiration date

The date a policy's coverage ends, shown for each coverage line. Different lines on the same certificate can expire on different days.

Additional insured

A party, such as a general contractor, added to someone else's policy, which may extend some of that policy's coverage to them, often for claims connected to the insured's work. It generally comes from the policy, usually through an endorsement, rather than from the certificate. See additional insured on a certificate.

Endorsement

An attachment that changes an insurance policy, for example to add an additional insured.

Waiver of subrogation

A policy provision under which an insurer gives up its right to recover a paid claim from another party. Certificates often show it in a "SUBR WVD" column.

Types of coverage

General liability (GL)

Insurance that generally relates to injury to others or damage to their property caused by a business's operations or work.

Workers' compensation (WC)

Insurance that generally provides benefits to employees injured on the job, required for many employers by state law.

Employers' liability

Coverage usually written alongside workers' compensation that generally relates to employee injury claims outside the workers' comp system.

Auto liability

Insurance that generally relates to injury or damage caused by vehicles used in the business.

Umbrella / excess liability

Additional liability limits that sit above other policies, often used when contracts require higher limits.

Each occurrence limit

The most a liability policy may pay for a single incident.

General aggregate limit

The most a liability policy may pay in total during the policy period, across all incidents.

Occurrence vs. claims-made

Two ways a liability policy can be triggered: an occurrence policy generally responds to incidents that happen during the policy period; a claims-made policy generally responds to claims made during it.

Workers' comp audits

Premium audit

A review, often after a policy period ends, that compares the payroll a workers' comp premium was estimated on with actual records, which may lead to a refund, additional premium or no change. See our workers' comp audit guide.

Estimated payroll

The payroll figure a workers' comp premium is initially based on, before the actual numbers are known.

Classification (class code)

A category describing the type of work being done, used to set workers' comp rates for the payroll in it.

Experience modification (mod)

A factor that may adjust a business's workers' comp premium up or down based on its claims history compared with similar businesses.

Uninsured subcontractor

A subcontractor without its own workers' comp coverage, or without evidence of it on file. At an audit, payments to an uninsured subcontractor may be added to the hiring contractor's payroll, depending on the carrier and state. See workers' comp audits and subcontractors.

Noncompliance charge

An additional charge some carriers may apply when a policyholder doesn't provide the records needed to complete an audit.

Exemptions and tax forms

Workers' comp exemption

A filing, available in some states, by which certain business owners elect to exclude themselves from workers' compensation coverage requirements. It generally applies to the person who files it, not their employees.

Certificate of Election to be Exempt

Florida's name for a workers' comp exemption certificate. Under Florida law, one issued since 2013 is valid for 2 years. See Florida workers' comp exemption.

Form W-9

An IRS form a business uses to collect a contractor's name and taxpayer identification number, commonly collected before the first payment. See 1099s for subcontractors.

Form 1099-NEC

The IRS form commonly used to report payments to non-employees, such as subcontractors, for services. For tax years beginning after 2025, the IRS reporting threshold is $2,000.

Frequently asked questions

What is the difference between a certificate holder and an additional insured?

A certificate holder is who the certificate was issued to. An additional insured is a party added to the policy itself, usually by endorsement. Being a certificate holder doesn't by itself make someone an additional insured.

What does COI stand for in construction?

COI stands for certificate of insurance, the one-page summary of a business's insurance that general contractors commonly collect from subcontractors.

What is a premium audit in workers' comp?

It's a review, often after the policy period, that compares the payroll your premium was estimated on with your actual payroll and records, which can lead to a refund, additional premium or no change.