Subcontractors are essential to oilfield operations, but they also represent one of the largest
hidden exposures to your business.

The Pitfall: Many companies accept subcontractors’ certificates of insurance at face value.
Certificates prove nothing more than that a policy existed on the day it was issued. They do not
guarantee coverage, nor do they show exclusions or lapses in payment. This creates a dangerous
assumption that your subs are insured—when they may not be.

The Fix: Implement a subcontractor compliance program that requires not just certificates, but
actual copies of policy endorsements. Verify coverage types, limits, and exclusions. Require
contractual indemnity provisions that transfer risk back to the subcontractor when appropriate.

Cost & Risk Angle: If a subcontractor is uninsured and an incident occurs, your policy becomes
the fallback. This not only increases your loss ratio and premiums but may also limit your ability
to secure future contracts with operators who review your loss history.

Takeaway: Subcontractors can either protect your bottom line or sink it. The pitfall is relying on
paper promises; the fix is verifying real coverage.

We can help set up a subcontractor compliance system tailored for oilfield operations.