Certificates of insurance for HVAC contractors: COIs, AI and waivers

What a certificate of insurance for contractors is, and what it isn't

A certificate of insurance for contractors is proof that your policies exist on the day it's printed. That's all it is. The standard form for liability lines is the ACORD 25. Its header says, in capital letters, that it's for information only and confers no rights on the certificate holder.

So the certificate can't widen your coverage. It can't promise a customer something your policy doesn't say. If an endorsement isn't on the policy, typing its name in the remarks box won't add it.

Some states put this in law. Since 2015, New York's Insurance Law §502 has barred a certificate from changing the policy it describes. It also bars anyone from demanding a certificate that does.

Texas has a similar rule in Insurance Code Chapter 1811. Certificates there must use approved forms, and they can't give the holder a contract right.

Customers aren't the only ones who ask. A Texas air conditioning and refrigeration contractor sends TDLR a liability certificate with the first license application, after a business name change and whenever the agency requests one. For a Class A license, the liability floor is $300,000 per occurrence.

For more on those two states, see our pages on HVAC contractor insurance in New York and HVAC contractor insurance in Texas.

The request usually lands at a bad time. You've won a change-out of six rooftop units at a strip center. The property manager wants paperwork before anyone climbs to the roof. This guide decodes the insurance exhibit attached to that email.

How to read an ACORD 25, box by box

A reviewer can reject a certificate over one wrong field. These are the boxes that matter most.

Insured, insurers and policy dates

The insured box has to match your legal name on the contract, down to "LLC" or "Inc." Each row shows a policy number, a carrier letter and the policy dates. Say your liability policy renews in March and the job runs through May. Expect the reviewer to ask for a fresh certificate after renewal.

The coverage rows

• General liability: the per-occurrence limit, the general aggregate and the completed operations aggregate. A checkbox shows if the aggregate applies per policy, per project or per location.
• Automobile liability: usually one combined limit per accident, plus boxes for owned, hired and non-owned autos.
• Umbrella or excess: the limit stacked over the policies below it.
• Workers' comp: comp at the state's statutory limits, plus three employer's liability limits.

The ADDL INSD and SUBR WVD columns

Two narrow columns sit beside each coverage row. One is for additional insured, and one is for subrogation waived. A "Y" tells the reviewer an endorsement exists. It should only appear when the form is really on the policy.

Description of operations and certificate holder

The description box is free text. It usually holds the project name, the job address and a note on which endorsements apply. The holder box is just who gets the copy. Being the holder gives that party no coverage.

Plenty of contract exhibits set a liability floor of $1 million each occurrence and a $2 million aggregate. One university's sample certificate for small jobs goes further. It asks for completed operations coverage for three years after the work ends.

Your contract sets the real number. When a contract asks for more than you carry, an umbrella policy for HVAC contractors is the usual fix.

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Additional insured: ongoing work vs. completed work

An additional insured is someone your policy protects for claims tied to your work. The policy still isn't in their name. It takes an endorsement. Most GCs ask for two of them on your general liability policy.

• Ongoing operations (ISO CG 20 10). This protects the GC or owner for harm from your work while you're still on the job.
• Completed operations (ISO CG 20 37). This extends that protection after you've finished and left the site.

Completed work is where many HVAC claims show up.

Example scenario: a crew swaps two air handlers above a school's ceiling grid over summer break. In October, a condensate line pulls loose and the drain pan overflows. Water ruins ceiling tiles and a classroom carpet. The district's claim names both the mechanical contractor and the GC. Whether the GC gets a defense from your policy may hinge on CG 20 37 or a similar form.

The 2013 and later editions protect the additional insured only when you, or your crew, had a hand in the harm. The coverage is no broader than your contract requires. It also pays no more than the contract amount or your limits, whichever is less.

So it typically won't cover a mistake that was only the GC's.

Blanket vs. scheduled additional insured

A blanket form automatically picks up any party your signed contract says to include. There's no new paperwork per job. A scheduled form lists one party by name, and sometimes one project.

Some big GCs won't accept anything but their own name on a scheduled form. Read the contract before you assume blanket wording is enough.

Additional insured on your vans

Many commercial exhibits also want the GC named on your auto policy. One GC's sample subcontract asks for ISO form CA 20 48 or an equal on the auto policy. It also wants the umbrella to follow the same terms.

Our page on commercial auto insurance for HVAC contractors covers the auto side.

Waiver of subrogation on liability, auto and comp

With a waiver of subrogation, your carrier agrees ahead of time not to chase the named party for money it paid on a claim. Normally, after a payout, a carrier can go after anyone else at fault. The waiver takes the GC or owner off that list.

Contracts often ask for the waiver on three policies. Each needs its own endorsement:

• General liability: ISO CG 24 04.
• Commercial auto: ISO CA 04 44. It works only if you waived recovery in a contract before the accident.
• Workers' comp: NCCI form WC 00 03 13. It applies only to work done under a written contract that calls for the waiver.

Example scenario: your tech slips on a wet roof membrane while servicing a rooftop unit. The building's own maintenance crew left a hose running. With no waiver, your comp carrier may seek repayment from the property owner. With one, it typically can't.

Carriers may charge for the comp waiver, and some states limit how it works. Ask before you sign. More detail sits on our workers' comp for HVAC contractors page.

Primary and non-contributory, in plain words

Primary and non-contributory wording means your policy responds first, and the GC's own carrier isn't asked to chip in. Without it, two policies on the same claim may split the bill.

On standard ISO forms, this comes from endorsement CG 20 01. It applies only when you agreed in a written contract that your policy would be primary and non-contributory. Even then, it only puts your policy ahead of a policy on which the additional insured is itself a named insured.

A waiver of subrogation does not make your policy primary. They're separate forms, and reviewers check for both.

Notice of cancellation and per-project aggregates

Notice of cancellation

The ACORD 25 doesn't promise the holder 30 days' notice. Its cancellation box says only that notice will be delivered under the policy's own provisions.

Some GC exhibits ask for advance written notice to each additional insured.

Some carriers offer an endorsement that mails notice to listed parties. Others don't. Tell us when a contract asks for it, and we'll check what your carrier allows.

Per-project aggregate

Your general aggregate is the most the policy pays for most claims in a year. Say you run five commercial jobs and one has a big loss. The other four share what's left. ISO endorsement CG 25 03 gives each listed project its own aggregate, equal to the one on your declarations page.

The ACORD 25 has a "project" checkbox to show it. Shops moving into commercial HVAC and mechanical work see this request far more often than residential replacement shops.

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