Before hiring a roofing contractor or any home service professional, homeowners should always confirm proper insurance coverage. One accident or mistake can lead to thousands of dollars in unexpected costs if the contractor is not insured.
The most important document to request is a Certificate of Insurance, commonly called a COI. This document helps homeowners verify that a contractor carries active insurance coverage and that the coverage is sufficient for the work being performed.
In this guide, we explain what a certificate of insurance is, how to read it, and what homeowners should look for before allowing work on their property.
What Is a Certificate of Insurance?
A certificate of insurance is an official document issued by an insurance company or broker. It provides proof that a contractor has active insurance coverage at the time it is issued.
This document does not replace the insurance policy itself, but it summarizes key details such as coverage types, policy limits, and effective dates. Contractors should be able to provide a certificate of insurance without hesitation when asked.
Why Verifying Insurance is a Legal Necessity for Homeowners
When searching for ‘how to verify contractor insurance’ or ‘roofing contractor liability,’ homeowners are often looking for a way to avoid the nightmare of being sued for a worker’s injury on their property. A Certificate of Insurance (COI) is your only legal shield against this risk. It is critical to understand that a contractor ‘saying’ they are insured is not the same as having a valid, active COI on file. You must look for two specific types of coverage: General Liability and Workers’ Compensation.
General Liability protects your home and personal property if the contractor accidentally causes a fire or major water damage during the project. However, Workers’ Compensation is even more vital. If a roofer falls off your roof and the company does not have Workers’ Comp, the injured worker may have the legal right to sue the homeowner for medical bills and lost wages. When you receive a COI, check the ‘Policy Expiration’ dates carefully. Many contractors provide old certificates that have since lapsed. Additionally, ensure the ‘Description of Operations’ specifically mentions roofing; some companies carry cheaper ‘handyman’ insurance that does not actually cover high-altitude roof work. At the NRCIA, we require our members to maintain the highest standards of professional accountability, ensuring that when you hire through our directory, you are working with professionals who value your financial safety as much as their own craftsmanship.
Why a Certificate of Insurance Matters for Homeowners
Hiring a contractor without verifying insurance can expose homeowners to serious financial and legal risks.
A valid certificate of insurance helps protect homeowners by:
Reducing liability if someone is injured on the property
Covering damage to the home caused by the contractor
Confirming the contractor meets basic professional standards
Without proper insurance, homeowners may be responsible for injuries, repairs, or legal claims related to the work.
What a Certificate of Insurance Looks Like
Most certificates of insurance follow a nationally recognized format known as the ACORD form. While it may appear complex, homeowners only need to review a few key sections to confirm coverage.
Key Sections Homeowners Should Review on a COI
Block 2: Insurance Broker Information
This section lists the insurance broker or agency managing the contractor’s policy. It confirms that the coverage is handled by a legitimate provider.
Block 3: Contractor Name
The contractor’s legal business name should match exactly who you are hiring and who will be paid for the work. Any mismatch is a red flag.
Block 5: Insurance Coverage Details
This section outlines the actual insurance policies in place. Homeowners should look for:
General Liability Insurance, typically marked with an “A”
Workers’ Compensation Insurance, often listed near the bottom of the form
General liability helps cover property damage, while workers’ compensation covers injuries to workers on your property.
Policy Dates and Limits
Always confirm that the policy is active and that coverage limits are appropriate for the scope of work.
Common Certificate of Insurance Red Flags
Homeowners should proceed with caution if a certificate shows:
Expired or missing policy dates
No workers’ compensation coverage
A business name that does not match the contractor
Unwillingness to provide a certificate
These issues may indicate inadequate coverage or unprofessional practices.
Certificate of Insurance vs Proof of Insurance
Some contractors may offer verbal assurances or informal documents as proof of insurance. A certificate of insurance is more reliable because it is issued by an insurance broker and reflects current coverage at the time of issuance.
Homeowners should always request a formal certificate rather than relying on verbal confirmation.
Why Proper Insurance Is Required by NRCIA
NRCIA emphasizes professional accountability and homeowner protection. Insurance requirements help ensure inspectors and contractors meet industry standards and reduce risk for homeowners.
Verifying insurance is one of the simplest steps homeowners can take to protect themselves before allowing work on their home.
How to Verify a COI: Don’t Just Take Their Word for It
Receiving a piece of paper that says “Certificate of Insurance” is only the first step. To ensure you are truly protected, you must verify the document’s authenticity. Fraudulent COIs are a growing concern in the home improvement industry.
Follow these three steps for absolute certainty:
Call the Producer: In “Block 2” of the ACORD form, you will find the name and phone number of the insurance broker (the Producer). Call them directly and ask: “Is [Contractor Name]’s policy [Policy Number] currently active and in good standing?”
Request to be an “Additional Insured”: For large projects like a full roof replacement, ask the contractor to have their agent add your name and address to the certificate as an “Additional Insured.” This ensures that if the policy is cancelled mid-project, the insurance company is legally obligated to notify you.
Check the Description of Operations: Look at the bottom of the form. Ensure it doesn’t contain exclusions that would void coverage for your specific project (e.g., an exclusion for “residential roofing” on a roofer’s policy).
The Danger of “Ghost Policies” in Roofing
A common pitfall for homeowners is the “Ghost Policy.” This is a Workers’ Compensation policy where the business owner is the only person covered, and all other workers are excluded. If a crew member falls off your roof and the contractor is running a ghost policy, the injured worker may sue you (the homeowner) for medical bills and lost wages. Always ensure the COI clearly states that Workers’ Comp coverage applies to “All employees” or “Statutory limits.”
General Liability vs. Workers’ Comp: Why You Need Both
General Liability (GL): This protects your property. If a contractor drops a bundle of shingles through your skylight or causes a fire, GL pays for the repairs to your home.
Workers’ Compensation: This protects people. If a roofer is injured on your property, this policy pays their medical bills. Without it, your homeowners’ insurance becomes the primary target for a lawsuit, which could lead to policy cancellation or massive premium hikes.
Protect Your Home Before Work Begins
Before hiring a contractor or scheduling an inspection, always confirm proper insurance coverage. Working with professionals who meet NRCIA standards helps protect your property, finances, and peace of mind.