Certificate of currency

A certificate of currency is issued by the insurer, or by the broker who placed the policy, at the request of the insured. It names the insured entity, the insurer, the policy number, the class of cover, the period of insurance and usually the sum insured or limit of liability. It is evidence that the policy was on foot at the moment it was printed.

On a construction project the flow is almost always the same. The head contractor sets out the insurances a subcontractor must hold, either in the subcontract or in the prequalification pack. The subcontractor asks their broker for certificates. The head contractor files them against the subcontractor record and checks them before anyone goes on site.

Because the certificate is a snapshot, the period of insurance printed on it does the real work. Most policies run for twelve months and the certificate is reissued at renewal. A subcontractor who was compliant in July can be uninsured in August without a single word on the original certificate changing.

For a deeper look, read Construction Insurance in Australia: What a Builder Actually Carries, and Where the Gaps Hide. Try the free Subcontractor Prequalification tool.

This is where builders get caught. The certificate confirms that a policy existed on a date. It does not confirm that the policy will respond to a claim.

Exclusions are not listed. A public liability policy can exclude the exact activity the subcontractor was engaged for, such as hot work, work above a set height, or work on a live roof, and the certificate will not mention it.

Conditions and endorsements are not listed. Cover is often conditional on controls being in place, such as a permit system, a fire watch or security fencing.

Cancellation is invisible. A policy cancelled for non payment the week after issue still leaves a valid looking certificate in the file.

The limit can be shared. One limit of liability usually sits across every job the subcontractor is running, so a large claim on another builder's site can erode what is available on yours.

Where the risk is significant, ask for the policy schedule or a letter from the broker confirming the specific cover, rather than relying on the certificate by itself.

The list changes with the trade and the contract, but on commercial work it usually covers the following.

Public and products liability. Covers injury to third parties and damage to third party property. Limits of $10 million or $20 million are common on commercial jobs, and the subcontract will state the figure required.

Workers compensation. Compulsory for employers in every state and territory. Sole traders and working directors are often not covered by it, which is one of the most common gaps found during onboarding.

Motor vehicle and mobile plant. Needed wherever the subcontractor brings vehicles or plant to site, and worth checking against the plant they actually turn up with.

Professional indemnity. Needed where the subcontractor carries design responsibility, which on design and construct jobs includes many services, structural and facade packages.

Contract works. Normally arranged for the project as a whole by the principal or head contractor rather than by each subcontractor.

Collecting once, at onboarding. The certificate is only true on its issue date, so renewal tracking has to be systematic rather than left to memory. A register with expiry dates and a named owner is the minimum.

Accepting a certificate in the wrong name. The entity on the certificate has to match the entity that signed the subcontract. Trusts, related companies and labour hire arrangements frequently do not line up, and a mismatch can leave the policy responding to a different legal entity.

Not checking the period against the programme. Cover has to run for the whole time the subcontractor is on site, including any return visits to rectify defects long after the trade finished.

Treating the certificate as proof of adequacy. It proves existence. Whether the cover is adequate for the work is a question for the contract requirements and, on larger risks, for the broker.

Forgetting your own policies. A head contractor diligently chasing subcontractor certificates still has to keep its own contract works and liability cover current, and aligned with the contract value as variations move it.