Do Your Sub-Contractors Have Valid Insurance?
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Large insurance companies don’t send out messages identifying potential problems without a reason.
Since we got the message below from Pinnacol Assurance, our Workers Compensation company, we assume they’re seeing a lot of fraudulent insurance certificates. And it can come back to bite you hard if you’re not careful!
You could be liable for your sub-contractors insurance coverage amounting to thousands of dollars in additional insurance premiums. Having to fight a court battle over this if someone actually got hurt will give you nightmares.
And while you’re at it, make sure they didn’t buy their insurance from some guy working out of the back of his car. The insurance is only as good as the company that wrote the policy.
The article below – reprinted from Pinnacol’s e-newsletter – tells how to spot a fraudulent certificate.
7 Ways to Identify a Fraudulent Certificate of Insurance
You’ve hired an independent contractor, and they’ve given you their certificate of workers’ compensation insurance coverage. Then, an accident occurs, and your contractor is injured and needs care. Good thing you have that certificate of insurance to prove coverage. But upon further inspection, your insurer discovers that it’s a fraud. Not only is your contractor in violation of the Colorado Workers’ Compensation Act, but you as the employer could be liable for his or her coverage, which can be devastating to a small business.
You don’t want to find yourself in this situation. By learning how to identify a fraudulent certificate, you can protect your business from becoming “the scene of a crime.”
Signs of a Fraudulent Certificate of Insurance:
1. Print date that’s outside of policy effective and expiration dates
2. Font inconsistency
3. Misspellings and grammar errors
4. Faint and/or crooked lines
These are just a few signs of a fraudulent certificate; see the rest for yourself. Producing a fraudulent certificate is a serious offense; in fact, it’s a class 5 felony. It’s nearly impossible for a fraud to go undetected, especially now that you are in the know. If you think you’ve received a fraudulent certificate of insurance, contact the insurance carrier listed on the certificate. If Pinnacol is the carrier, please call 303.361.4000 and ask for our special investigations unit.
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