Certificates of Insurance – To Keep & How Long To Keep

Client Question About Certificates of Insurance

Hello Scott,

We have a practice in place that when a contractor does work for us, we have them provide us with an insurance binder as proof of general liability insurance.  How long after policy expiration date should we keep these items?

Thank you,

Kim

My Reply
The easy answer is to keep them forever. I’m not sure that is right. Let’s walk through it…
You get certificates for a few reasons:
-Help with proof the contractor is not an employee.
-Assurance of the contractor’s good business practices.
-An excuse to get rid of customers who own pickup trucks and who think they should be your landscaper.
-Your workers’ compensation insurer will try to call contractors employees unless they have their own workers’ compensation.
-Assurance that if the contractor burns your building down, injures an employee, or hurts a customer, there is some financial heft so you won’t have to pay.
The last two are the only reasons that you need to keep certificates past expiration. The last one is the only one that would require (perhaps) proof after twenty-four months.
So then the question is, how long would we need the certificate in the event a lawsuit came up? Five years is probably plenty – until it isn’t.
My father consults with insurance companies on very old policies (1950s in some cases). Proof of insurance can make or break a case. It’s rare, admittedly. I’m reluctant to recommend throwing anything out about a liability insurance issue. With digital storage, it’s easier to keep stuff.
Sorry for the non-answer.