At the end of a policy term, a GC's general liability and workers' comp insurers audit actual payroll and subcontractor payments to set the final premium. Payments to subs who could not show their own valid coverage are often reclassified as the GC's exposure.
The financial sting of an audit is a direct incentive to keep clean COIs on file for every sub. Producing certificates on demand during an audit can save a GC thousands in retroactive premium charges.