What Is a Certificate of Insurance?
A certificate of insurance (COI) serves to prove adequate coverage exists for a specific project or job. Often requested in the case of a project or job with liability concerns or the possibility of great financial loss, a COI proves to your client that certain liabilities will be covered by your insurance policy. While a COI is not coverage in and of itself, it does protect both you and your partners or clients by giving you both peace of mind before beginning a project.
Certificates of insurance contain all the essential details of your business insurance policy in a compact, convenient, easy to digest format. A standard COI includes the most pertinent aspects of your coverage, including:
- Policy holder’s name and mailing address
- Policy effective date
- Type of coverage
- Policy limits
- Policy numbers
- Contact information of provident insurance company
Who Needs a Certificate of Insurance?
If you own or operate a business, especially if your business performs and provides a service, you need a COI. Regardless of the level of risk of liability, carrying proof of insurance is a good idea. Without it, it may be challenging to secure contracts and clients, especially if your competitors have a COI at the ready.
Benefits of a Certificate of Insurance
A certificate of insurance proves your insurance status. It serves as a summary of your insurance policy, without requiring you to carry around the bulky policy itself.
A COI provides quick access to essential information. Think of a COI as an “to-go” version of your insurance policy. The convenience of having this small document ready to go can save you hours (even weeks!) of time over the course of a year.
A certificate of insurance can reduce your risk as well. Being able to immediately check your coverage limits with a potential project’s coverage requirements can get you started on a project quicker and protect you from potentially costly litigation.
How to Get a Certificate of Insurance
When you purchase your commercial insurance, your insurance agent may include your COI in your initial insurance documentation. If that doesn’t happen, contact them and ask them to provide you with one.
Should you have to request a COI from your insurance agent, here are the basic steps involved:
- Ask the client requesting the COI what the coverage limits and minimums should be based on the contract requirements.
- Obtain the client’s name, address, and tax identification number. This information will be helpful and save significant time in the event you need to increase your premium.
- Contact your agent and let them know the minimum coverage amount(s) and that a client is requesting proof of insurance. If your policy already meets the requirements, the agent can quickly issue the COI. If you need to increase coverage, the process takes a little longer.
Once all of the above have been confirmed or completed, your insurance agent will create the certificate of insurance and mail you a printed copy. Upon receipt, you will usually be required to mail the COI to your clients in order for them to verify your coverage.
Obtaining a COI is a fairly straightforward process, but it can take days to weeks to complete, especially if policy changes are required. Be sure to communicate this with your client.
How Much Does a Certificate of Insurance Cost?
Providing a certificate of insurance is a complimentary service from your insurance broker, so there is no cost to obtain a COI. If the project requires extra coverage unmet through your current policy, you may have to pay an additional premium to cover the costs or purchase a commercial umbrella policy, but the COI itself should cost you nothing.
Should I Ask My Suppliers and Contractors for a COI?
Yes. Contractors or suppliers you work with should be prepared to show proof of insurance, just as you should be prepared to show your clients proof of insurance when requested. In order to make sure the companies or individual contractors you work with have proper coverage in place, you need to request to see a COI.
Here are a few important things to do when checking a contractor’s certificate of insurance:
- Contact the listed agent/insurer on the COI for authentication.
- Ensure coverage limits are adequate.
- Confirm expiration and effective dates of coverage.
- Make sure the individual business, contractor, or subcontractor name on the COI matches exactly to the company you are doing business with.
- Keep a record of the time and date of any calls made, as well as a record of with whom you spoke.
- A certificate of insurance serves as a quick snapshot of your commercial insurance policy.
- All business owners should carry a COI.
- Having a certificate of insurance on hand can both get you hired more quickly and allow you to begin a project sooner.
- A COI is not insurance, but does serve as a form of protection for both the client and the business owner.
- A COI is easy to obtain, but the process can take days or weeks depending on your specific situation.
- Obtaining a COI is free.
Contact Us Today!
If you’re in need of business insurance, or already a policyholder with Malhotra but need a COI, contact us today. We can help!