Glossary · PA Workers' Comp

Certificates of Insurance (Subcontractor COIs)

Documents proving subcontractors carry their own workers' comp coverage, required to exclude subcontractor payroll from your workers' comp audit.

Definition

A certificate of insurance (COI) is a document issued by an insurance carrier that proves a subcontractor carries their own workers' compensation coverage. For general contractors and businesses using subcontractors, collecting COIs before work begins is essential to avoiding audit surcharges.

Subcontractor COIs and Workers' Comp Audits: What You Must Collect and When

If a subcontractor does not have their own workers' comp coverage, Pennsylvania workers' comp rules generally treat them as employees of the contractor that hired them. Their payroll is added to your audit and charged at your applicable class code rate.

COIs must show active coverage for the policy period during which the subcontractor worked for you. A COI showing coverage from last year does not prove coverage for current work.

Keep a COI on file for every subcontractor before they start work — and update the file when their policy renews. Many contractors use tracking software to manage COI expirations.

Even if a subcontractor is legitimately an independent contractor under IRS and employment law standards, workers' comp audit rules may still require you to add them to your payroll unless they can prove their own coverage.