The Hidden Cost of COI Non-Compliance: What Construction Leaders Need to Know

In the construction industry, Certificates of Insurance (COIs) are often treated as paperwork—another box to check during vendor onboarding or project initiation. But when COIs are missing, expired, or non-compliant, the cost of that oversight can be staggering.

Too many companies underestimate the true financial, operational, and legal risks tied to insurance compliance. If risk isn’t top of mind now, one unexpected incident could change that instantly.

Here’s why it pays—literally and strategically—to bring COI compliance into the spotlight.

1. The Financial Fallout: Claims and Uncovered Losses

A subcontractor walks onto a site with expired or insufficient insurance. An accident occurs. The claim comes in—and it’s denied due to lack of coverage. Guess who’s now on the hook?

• The average cost of a construction claim involving uninsured subcontractors ranges from $75,000 to $150,000.
• In some cases, liability from a single incident can exceed $500,000, especially when property damage or personal injury is involved.
• If the company is found to be out of compliance with contractual obligations, that can escalate into multi-million dollar litigation.

For most organizations, these risks dwarf the cost of investing in a proper compliance and tracking system.

2. Operational Disruption and Resource Drain

COI tracking is often managed manually through spreadsheets, email threads, and file shares—systems that are prone to human error and nearly impossible to scale.

• Compliance teams can spend 100–200 hours per year chasing vendors for missing or updated COIs.
• Projects may be delayed due to hold-ups in verifying insurance or onboarding vendors.
• Internal audits become high-stress, high-risk events when documentation is scattered or outdated.

This inefficiency slows down operations, frustrates teams, and opens gaps that are hard to detect until it's too late.

3. Legal Exposure and Brand Damage

COI non-compliance isn’t just a project-level issue—it can have serious legal and reputational implications for the entire organization.

• Breach of contract: When insurance requirements aren’t met, you may be violating terms with clients, lenders, or partners.
• Executive liability: Leadership can be held accountable for inadequate risk oversight, especially in publicly traded or regulated companies.
• Reputation erosion: Repeated non-compliance or a public legal issue can damage your standing with insurers, subcontractors, and future clients.

When something goes wrong, your systems—or lack thereof—become part of the discovery process.

4. The ROI of Proactive COI Management

There’s a common misconception that COI tracking software is an added cost. In reality, it’s an insurance policy against avoidable chaos.

A solution like Asuretify, part of InjalaOne, automates COI collection, validation, and compliance monitoring. It transforms insurance tracking from a fragmented back-office task into a centralized, real-time risk control process.

• Save time and reduce manual work
• Avoid project delays
• Gain full visibility into vendor compliance
• Stay audit-ready year-round
• Prevent six-figure losses from non-compliance

Asuretify doesn’t just help you track COIs—it helps you avoid the headlines.

Takeaway: Risk Is Not Optional—Visibility Shouldn’t Be Either

The construction industry runs on risk. But while general liability and builders’ risk policies are well-understood, insurance compliance workflows often remain an afterthought.

It’s time to treat COI compliance not as a formality, but as a strategic function—one that protects your projects, your people, and your profits.

Interested in seeing how Asuretify can protect your organization from hidden risk? Contact us to schedule a demo or learn more.