When a sub's insurance expires mid-job

First: lapsed policy, or lapsed paperwork?

These look identical in your file and are completely different problems. In the common case the sub's policy renewed on schedule and their agent simply never sent you the new certificate — annoying, five minutes to fix, no exposure. In the other case the policy genuinely ended, and every hour worked since is uninsured.

Ask the producer — the agency in the upper-left box of the last certificate you hold — not the sub. They can confirm in a sentence whether the policy is in force and issue a current certificate the same day. A sub telling you ‘we're covered, it renewed’ is reporting what they believe; the agency is reporting what the carrier's system says.

What a real gap actually exposes

Three separate exposures, and they do not resolve together:

• Nobody's policy responds to an incident in the gap. A standard general liability policy is written on an occurrence basis — it covers injury or damage that happens during the policy period. Buying a new policy on Wednesday does not generally cover a Tuesday incident, no matter how quickly it is bought.
• Your additional-insured protection goes with it. If you were named additional insured on the sub's policy, that status lives on that policy. When it lapses, your claim against it does too, and the claim arrives at your own general liability instead — with your deductible and your loss history.
• Your premium audit picks it up regardless of whether anything happens. Carriers routinely charge the contractor for payroll paid to subcontractors who cannot show coverage for the period, treating them as your own labor. That is a real cost, months later, on a job where nothing went wrong.

The workers' compensation side has its own version of this: if the sub had no comp in force and one of their people is hurt, the question of whose employee they were is decided by state law rather than by your subcontract. Rules differ enough between states that the only safe answer is your state's — what to do when a sub says they're exempt covers the legitimate exemption cases and where they stop.

The options actually in front of you

In rough order of how most contractors handle it. Which are available to you depends on what your subcontract says and what your own counsel advises — this page cannot make that call, and any page that claims to is guessing about your contract.

1. 1Get the current certificate and the effective date. Usually this is where it ends, because the policy renewed on schedule and only the paperwork lapsed.
2. 2If there is a gap: establish exactly when it started and ended. Write the two dates down. Everything below depends on them, and so does any conversation with your own carrier.
3. 3Decide about work performed during the gap. Nothing you do now insures it retroactively. What you can do is document it — what was done, by whom, on which dates — so that if a claim surfaces later you are not reconstructing it from memory.
4. 4Decide about work going forward. Most subcontracts give the GC a right to suspend work or withhold payment until proof of insurance is produced. Whether to use it is a commercial judgment about schedule against exposure, and it is a genuinely hard one.
5. 5Write down what you decided and why. If you allowed work to continue, that decision should exist somewhere other than in your head. This is exactly what an audit or a claim asks about later.

This is not legal advice, and the right answer depends on your contract and your state — talk to your counsel or your broker before you rely on any of it. And a sub who has genuinely lapsed is usually having a cash-flow problem rather than hiding something; that changes how you have the conversation, not whether you have it.

Stopping it happening again

Every lapse is the same failure: the expiry date passed and nobody was looking that week. Not a paperwork failure — an attention failure. Which is why the fix is never ‘be more careful’.

• Ask early. Request the renewal certificate around 30 days out. Agents are not fast, and a request sent on the expiry date is already late.
• Track the date, not a status. A ‘compliant’ column is true right up until the moment it silently is not. A date sorts, and an expiry sorts to the top by itself.
• Put a rule in the subcontract. A specific term — proof of insurance before mobilization, notice before cancellation, and a stated consequence — is what gives you a lever when you need one. Add it to what you require before a sub starts rather than raising it for the first time mid-job.
• Have somebody or something check every week. Our free template is enough for a handful of subs, as long as somebody actually opens it.

One caution about relying on the cancellation clause: the ACORD 25's cancellation box says the insurer will endeavor to give notice ‘in accordance with the policy provisions’ — which usually means notice to the named insured, not to you. Read notice of cancellation before you treat that line as a safety net.