Regardless of the nature of your business, your clients may require from you a certificate of insurance before providing any type of service. Similarly, if the business you run regularly outsources work to third-party vendors and subcontractors, you might ask from them a certificate of insurance. So what is a certificate of insurance and what makes it so vitally important in pursuing business relations and transactions?
What is a certificate of insurance?
A certificate of insurance is a certified document that is issued by insurance carriers, brokers and agents to provide information on specific overages. The sole purpose is to verify the existence and extent the insurance coverage of a particular business organization.
A certificate of insurance (COI), also known as an Acord certificate provides policy details on your liability insurance coverage, verifying that you have the business insurance you claim to have. It summarizes essential information like the types and limits of coverage, the issuing insurance company, your policy number, insurance limits, the named insured and the policy’s effective and expiration dates.
Why do I need a certificate of insurance?
If you are a business owner, you need a certificate of insurance to prove to your clients that your organization carries the necessary insurance policies. A certificate of insurance, otherwise referred to as proof of insurance, is typically necessary when a business transaction has to deal with possible liabilities and losses.
“If you are operating without a certificate of insurance, please stop what you are doing and obtain the proper coverage for your business. Seriously!”
How do you get a COI or certificate of liability insurance?
First you will want to ask the company requesting the certificate of insurance what the coverage minimums and limits need to be. Each vendor has different requirements. For example, if you are leasing film equipment, you may be required to have $1 million in loss and $5 million in damages covered by insurance. Obtain the vendor name, address and tax identification number.
From there you should call your insurance provider or agent. Explain that you need a certificate of insurance and what the minimum coverage amounts are. The agent will confirm that your policy meets those minimum requirements. If it doesn’t, you might need to purchase a rider that increases coverage for the duration of the event. Your insurance agent will give you the details and paperwork.
How long does it a take to get a COI?
If you need a certificate of insurance to fulfill a contract requirement or would just like to have a copy on file, contact your insurer. When you purchase small business insurance from Choice Plus Insurance Service, Inc. a certificate of insurance is included in the docs you receive upon purchasing your policy. However, if it is an immediate need, we can provide you with one while we are on the phone with you. That being said, if every COI you request is an emergency, be prepared for a chat on planning ahead for these events. Last minute things happen, but every job shouldn’t need an immediate certificate of insurance.
How much does it cost to get a COI?
Nothing, COI’s are part of the service we provide to our customers. If your broker is charging you a per certificate fee, it’s time to find a new broker ASAP. However, sometimes a particular job can require additional coverage which results in additional premium. Choice Plus Insurance Service, Inc never charges fees for providing certificates of insurance regardless of how many you need. The Acord 25 is by far the most requested certificate of insurance. Most general contractors and building owners will accept this form with the proper certificate holder and additional required wording.
If you need a COI for a project you are about to start, please take the step to contact someone at your trusted agency. From start to finish we aim to make the insurance buying and operating process as simple as possible. To receive a QUOTE today or request a certificate of insurance call into a insurance specialist at (714) 695-1127 or check us out at www.choiceplusis.com