An Overview of Certificates of Insurance
A Certificate of Insurance is a document that explains that your business has active and up to date insurance coverage. Before you conduct business, many of your customers or vendors may ask to see a Certificate of Insurance to see that your business has insurance before they work with you. Every time a potential customer asks for proof of insurance from your company, you will need to produce a new Certificate of Insurance. The document should be designed specifically for that customer. Providing a new Certificate of Insurance helps the customer gain confidence that they are viewing the most current projections of your company’s insurance coverage.
- Why A Certificate of Insurance Is an Asset
A Certificate of Insurance is an asset because it provides potential customers or vendors with quick access to information. It allows them to verify that your business has coverage without them having to look over your entire insurance policy. a Certificate of Insurance also helps reduce liability risks. If something goes wrong, you should be able to transfer the loss to the third-party insurer. Having a Certificate of Insurance also allows you to protect yourself when you have to outsource your work. Outsourcing work comes with a unique set of hazards. Comparing each vendor’s insurance policy against your insurance can help you avoid a situation where you are facing litigation and the profitability of your business is at risk.
- Types of Certificates of Insurance
General Liability Insurance
A Certificate of Liability Insurance protects you and makes it easy to transfer risk from a project owner to a vendor. The policy outlines the insured status and describes the operations and tasks that the vendor is working on. The policy also states that this is your business’ primary coverage. A Certificate of Liability insurance may also include a waiver of subrogation.
Certification of Auto Liability Insurance
Auto liability insurance protects your business vehicles if they cause damage to someone else’s property. The certificate of insurance should be provided for all vendor owned, non-owned, leased, and hired vehicles.
Certificate of Workers Insurance
Workers’ compensation allows you to protect both your business and your employees. This policy protects you in the event of an injury in the workplace. You are also able to take care of your employees when they get hurt by covering their medical bills. Workers’ compensation insurance is mandatory if you have employees. The document should be written using the most up to date state laws.
- Why Is A Certificate of Insurance Important?
Without a Certificate of Insurance, your business will likely have a hard time winning contracts over your competitors. Your potential clients want to be sure that you have liability insurance so that they will not be held liable if the contractor performs poorly, causes damage, or gets injured. You also need a Certificate of Insurance the next time your business is audited. A Certificate of Insurance will prevent you from paying a higher premium on your policies for your employees’ sales and payroll.
- Requesting A Certificate of Insurance
Consult with your client and ask them what the minimum limits of the coverage should be. Next, get all of your client’s direct information including their tax identification number. This is important if you have to increase your premium in the future. Speak with your broker. Once you tell them the minimum coverage amount and your proof of insurance, your broker will contact your carrier to get the certificate. If more information is needed, you will be given the necessary paperwork to fill out. Once everything is submitted, your broker will create the Certificate of Insurance and send a copy for you and your client to sign. Be aware that the entire process may take a few days or a few weeks to complete, depending on whether you need to fill out extra paperwork.
A Certificate of Insurance helps you show potential clients that are doing business with a credible company. If you have any questions about your insurance policies, contact the experts at Remland Insurance. We will assist you with all your commercial insurance needs.
