The rule in one line
No current, verified certificate meeting the subcontract’s requirements → no payment.
Why an expired COI should stop payment
If a subcontractor’s coverage lapses and something goes wrong on site, the loss can fall back on the general contractor or owner. Holding payment is the strongest lever you have to get a renewal certificate.
- Your subcontract almost certainly requires the subcontractor to carry specific insurance for the duration of the work.
- A certificate is evidence of coverage on the day it was issued — it does not tell you the policy is still in force months later.
What a certificate of insurance does (and does not) prove
A COI — in the US usually the ACORD 25 certificate of liability insurance — summarizes a policy’s insurer, policy numbers, dates, and limits. It is issued as a matter of information only and does not amend, extend, or alter the coverage of the underlying policies.
That disclaimer is why additional-insured status should be confirmed by the policy endorsement, not by a checkbox on the certificate. Treat the certificate as a tracking record and the endorsement as the proof.
| Check on every certificate | Why |
|---|---|
| Named insured matches the subcontractor’s legal name | A certificate for an affiliate does not cover your sub |
| Coverage types required by the subcontract | For example general liability, auto, workers’ compensation, umbrella |
| Limits at or above your minimums | Per occurrence and aggregate |
| Effective and expiration dates | Coverage must span the period the sub is on site |
| Certificate holder and additional-insured wording | Confirm the endorsement where your contract requires it |
The workflow: from requirement to payment hold
Define requirements, collect and verify certificates, watch expiration dates, and make a valid certificate a condition of every payment.
- 1Set insurance requirements per subcontractor (and per job where they differ): coverage types, minimum limits, and whether a lapse should block payment.
- 2Collect a certificate of insurance before the subcontractor starts work, and review it against the requirements.
- 3Record each policy’s effective and expiration dates, insurer, policy number, and limit.
- 4Ask for renewal certificates before policies expire and track who has responded.
- 5At expiration, mark the certificate expired and place a payment hold on the subcontractor.
- 6Before every payment run, check that each payee has current, verified coverage that meets the requirement.
- 7Release the hold only when a renewed certificate is received and verified, and keep the history for audit.
Spreadsheet vs COI tracking software
A spreadsheet works for a handful of subcontractors if someone checks it before every payment run; software is worth it once the check is easy to forget or the payment happens in a different system from the tracking.
| Spreadsheet | COI tracking connected to AP | |
|---|---|---|
| Expiry detection | Someone filters by date | Scheduled job marks certificates expired |
| Payment hold | A person has to remember | Payment is refused while the hold is active |
| Sub uploads renewals | Email attachments | Upload link or portal |
| Audit history | Overwritten cells | Status history per certificate |
What to look for in COI tracking software
The deciding feature is whether an expired or missing certificate actually stops the payment, not just whether it sends an alert.
- Requirements per subcontractor and per job, with minimum limits by coverage type.
- Automatic expiry status and a payment block tied to it.
- A way for subcontractors to upload renewals themselves.
- Review status (pending, verified, rejected) so unchecked certificates do not count.
- Reminders before expiration as well as notices after.
- An audit trail of who verified what and when.
- The other compliance gates in the same place: W-9 and lien waivers.
Insurance is one item on the compliance checklist
Pair the COI check with W-9, lien waiver, and licence checks so one review clears a subcontractor for payment.
Use the printable subcontractor compliance checklist.
Aequo Build
How Aequo Build handles expired COIs
In Aequo Build you set insurance requirements per vendor — globally or per job — with coverage type, minimum limit, and whether a lapse blocks payment. Subcontractors can upload certificates through their portal link; uploads land as pending review until your team verifies them.
An hourly job marks certificates expired, turns on the payment block, and emails the vendor an expiry notice. When you start a payment in Aequo Build, it is refused if the vendor has an expired, rejected, or blocked certificate, or if a required coverage has no verified, current certificate at the required limit. The same payment check also enforces W-9 and lien-waiver requirements. An “expiring soon” view shows what is about to lapse so you can chase renewals.
The hold applies to payments initiated in Aequo Build; it does not stop a payment someone makes directly in QuickBooks.
Frequently asked questions
Can I withhold payment if a subcontractor’s insurance expires?
Usually, if your subcontract requires continuous coverage and allows withholding for non-compliance — check the contract language and any state prompt-payment rules that apply. Most contractors write the right to withhold into the subcontract for this reason.
Is a certificate of insurance proof of coverage?
It is evidence of coverage as of the date issued. The ACORD 25 states it is issued as a matter of information only and does not amend, extend, or alter the policies, so confirm additional-insured status with the endorsement.
How often should COIs be checked?
At onboarding, at every renewal, and — most importantly — automatically before every payment.
What is COI tracking software?
Software that stores certificates of insurance, compares them to your requirements, tracks expiration dates, and alerts or blocks when coverage is missing or expired.
Related guides and tools
Sources
This guide describes common practice. It is not legal or insurance advice; your subcontract, insurer, and state law determine what you may require and withhold.
Part of the Construction AP Knowledge Centre.