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Fake certificates and phantom insurers: what state regulators have warned
Regulators don't publish a count of fake certificates. They do publish warnings, and in one state, a law. Read together, the advice is consistent: verify independently, and never trust the contact details on the document you're checking.
By The editors, COI Journal ·
The questionHow common are fake certificates of insurance, and what do state regulators advise contractors and GCs to do?
Key findings
- New Jersey made a false or misleading certificate of insurance a violation of its insurance fraud law, with penalties of up to $5,000, $10,000 and $15,000 for first, second and third violations.
- Maryland warned small construction, painting and cleaning businesses about fraudulent offers of general liability and workers' comp, and said to verify producers and insurers through the state's own search tools.
- Texas's insurance department advises asking for a contractor's certificate and calling the listed companies to verify coverage.
- We found no regulator that publishes how often fake certificates occur. The consistent advice is independent verification.
New Jersey made it a fraud law violation
In 2016, New Jersey's Department of Banking and Insurance alerted brokers and contractors that, under the state's Certificates of Insurance Act, a false or misleading certificate is a violation of the Insurance Fraud Prevention Act, the department announced. Penalties run up to $5,000 for a first violation, $10,000 for a second and $15,000 for a third. The department said that previously, bad actors could use fraudulent certificates to claim liability coverage they didn't have.
Maryland: fake policies sold to small contractors
In 2024, the Maryland Insurance Administration warned of fraudulent offers selling general liability or workers' comp to small painting, construction and cleaning businesses by email, text and phone, Insurance Journal reported. Its advice: don't use the contact details in the offer, verify the producer and the insurer through the state's own search tools, and contact them using details found independently.
That matters to GCs because a trade that bought a fake policy may hand over a certificate in good faith.
Texas: call the companies
After Hurricane Beryl in 2024, the Texas Department of Insurance told consumers to ask contractors for a certificate of insurance and bond certification, and to call the listed companies to verify coverage.
Florida: check the license and the workers' comp
Florida's Insurance Consumer Advocate tells consumers to verify a contractor's license and to check workers' comp through the state's proof of coverage or exemption databases. See Checking workers' comp yourself.
And in 2026, a federal grand jury indicted two men tied to two companies that weren't licensed to write property and casualty coverage in Florida; prosecutors allege they issued falsified certificates, Insurance Journal reported. Both pleaded not guilty.
What we didn't find
None of these regulators publishes a count of fake certificates. Any statistic claiming to measure how common they are should be read with care, and asked for its source.
The common advice, as a GC checklist
- Verify the carrier independently. Look it up through your state insurance department or the NAIC's Consumer Insurance Search.
- Verify the producer independently. Find the broker's contact details yourself, not from the certificate, and confirm the certificate with them.
- Check workers' comp where the state lets you.
- Ask for endorsements. A forger can fill in a checkbox. Endorsements are harder to fake convincingly, and a broker can confirm them.
- Report suspected fraud to your state's insurance fraud unit.
How we wrote this
Based on releases and alerts from the New Jersey Department of Banking and Insurance (2016), the Texas Department of Insurance (2024), the Florida Office of the Insurance Consumer Advocate (undated), and Insurance Journal's report of a Maryland Insurance Administration warning (2024), plus 2026 federal charges reported by Insurance Journal. General information, not legal advice.
Sources
- Christie Administration Alerts Insurance Brokers and Contractors That Falsifying Insurance Certificates is Insurance Fraud, New Jersey Department of Banking and Insurance, February 23, 2016
- Maryland Issues Insurance Scam Warning for Businesses, Insurance Journal, February 16, 2024
- Do you know the signs of a contracting scam? Tips to avoid post-Beryl scams, Texas Department of Insurance, July 15, 2024
- Consumer Alert: Don't Fall Victim to Contractor Fraud, Florida Office of the Insurance Consumer Advocate
- Florida Men Charged With Creating Sham Insurance Now Face Federal Indictment, Insurance Journal, William Rabb, October 29, 2026
- Consumer Insurance Search, National Association of Insurance Commissioners
General information, not legal or insurance advice. Read your contracts and policies with your broker or attorney. COI Journal is published by Forsured, which sells construction insurance compliance software. How we keep editorial separate.
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