What is a Certificate of Insurance
What is a Certificate of Insurance
Understanding the Commercial Certificate of Insurance
As a business owner, you know how important it is to have proper coverage. You need property coverage for your belongings, general liability coverage to cover your liabilities and potential risks, workers compensation coverage for your employees, and maybe even a few other coverages. As you start to do business with other companies or customers you'll begin to receive requests for certificates of insurance proving you have commercial insurance coverage.
What is a Certificate of Insurance?
A certificate of insurance is a document that can only be issued by your insurance company or insurance agent. They are generally issued on a case-by-case basis and they detail the coverages you have for your business.
Let's say, for example, you are an arborist. Your potential clients will want to make sure you have general liability coverage to pay for any damages associated with mistakes you might make or damages you may cause while taking down a tree. If you subcontract with another firm, you'll have to show proof of not only general liability, but perhaps of your auto coverage as well. The certificate proves that you have coverage so that those you are working with will not have to assume you as a risk.
Certificates of insurance are usually issued on what is known as an Acord 25 form. This is a standard certificate form that almost all insurance agencies and companies recognize and use.
Certificate Holder vs. Additional Insured
When a client asks for a certificate of insurance, they are generally listed as a "certificate holder." A certificate of this nature is issued for informational purposes only and, because it comes directly from your agent, is considered legal proof that you have coverage at the time the job is done.
Sometimes your clients will ask to be added to your policy as an "additional insured." This changes the scope of the certificate completely and requires a formal change to your insurance policy. Adding a client as an additional insured means that your insurance policy will protect him if he is sued due to damages you cause during the scope of your work. This is a very common requirement for those who are acting as subcontractors under another, larger group. When this happens, the company will be issued a certificate showing your commercial insurance but there will be additional wording indicating that they have been added as an additional insured. Check with your commercial insurance companies because this wording may include specific dates or an indication of the job the certificate applies to, if necessary.
Obtaining a Certificate of Insurance
Your Minneapolis insurance agent will not give you a stack of black certificates for you to give your certificate holders as needed. The purpose of the certificate being issued by the agency is to serve as current proof of coverage - something your agent won't issue if you haven't paid your bill or if part of your coverage has lapsed. Obtaining a certificate is usually as simple as a phone call, but don't wait until the last minute to make your request. Your agent will need time to put the certificate together and then mail or fax it to your client.
Talk to your agent if you don't understand the commercial insurance limits listed on your certificate. He or she will be able to make any clarifications you need. Pet insurance Ireland: biggest necessity of our pets The revolution of petrol chainsaws Summary of the Ministry of Apostle Peter to the Jews by Nancy Wood Always Get the Insured Certificate of Deposit Rates (CD) Dog Shampoo For Dummies Filing a Petition for a Conservatorship How To-Dog Allergies Dog Ruined My Wooden Flooring How to Train a Siberian Husky Dog Why Is a Sheltie So Popular As a Companion Dog Dove Cresswells Dog Training Online Review - Any Worth? Dog Trainer Handbook Fast Contrast, Don't Compete