The renewal audit: why a subcontractor’s lapsed certificate costs you money
Updated 2026-09-14 · general information, not legal or insurance advice
Most builders meet the cost of an uninsured subcontractor not on site, but months later — in the post, as an extra premium charge after their insurance renewal audit. Here’s how that happens and how to stop it.
How the audit works
Your Employers’ and Public Liability premiums are usually estimated up front on your expected wageroll and turnover. At renewal, the insurer audits the real figures. Payments to subcontractors are part of that — and how each sub is treated depends on whether they had their own cover.
The labour-only trap
A labour-only subcontractor who can’t produce their own Employers’ and Public Liability for the period they worked is treated as if they were your employee. Their payments are added to your wageroll, and you’re charged premium on them — often hundreds or thousands of pounds you didn’t budget for. A bona-fide sub with their own cover is excluded from that calculation.
Underinsurance and averaging
If you under-declare your subcontractor spend to keep the premium down, the averaging clause can bite when you claim: declare 80% of what you should have and the insurer may pay only 80% of the claim. You find out the day you need the policy most.
How to avoid the surprise
- Collect and keep current each sub’s EL and PL certificates for the whole time they’re engaged.
- Keep an audit trail you can hand your insurer — the certificate, the dates, and evidence you checked.
- Chase renewals before they lapse, not after.
Doing this by hand across 5–50 subs is where it falls apart. CoverWatch keeps every certificate current automatically and produces the evidence pack your insurer asks for at audit.