A Certificate of Insurance (COI), also known as a Certificate of Liability Insurance, is a one-page document that summarizes your coverage and can be shared as proof of insurance. It contains policy details such as specific coverage, limitations and effective dates, but is not an insurance contract. Companies often require liability insurance from the companies they work with because they do not want to risk being held solely liable. In such circumstances, the company will require proof of insurance or COI.
Business owners who need immediate liability coverage and COI should apply to Next. A small business insurance company that allows you to create a free, instant COI of him and share it as many times as you want online or via an app.
How to request insurance card
You should receive your COI when you receive your first policy document. However, as your business grows, or if your coverage needs to change, you may need additional copies. COI can be claimed through the insurance company that originally sold the policy. This may be a carrier, agent, or commercial broker.
If you need to change your coverage, you can obtain a new COI by following the process below.
- Step 1: Check the coverage and limitations you need. If the company asks for higher limits than you already have, it may take a little longer to get your COI as they wait for your coverage to adjust.
- Step 2: Check coverage limits with your provider. If you need to raise your limits, you may be able to adjust your policy or purchase a rider to cover the length of your contract. Your insurance agent can help you with this process.
- Step 3: Request a certificate after making changes. This requires submitting the necessary documentation for coverage adjustments, submitting payments, and requesting a certificate stating the appropriate limits.
- Step 4: Give the certificate to the client. Some companies want paper copies that can be saved on file, while others are happy with PDFs sent by email.
Some insurers charge up to $50 per COI, while others offer it for free. Certificate requests can take minutes or days to complete. If the insurance company manually creates the certificate, or if the certificate holder’s information is incorrect, or if the company you work for requires unique wording on the certificate, your certificate is more It can take a long time.
Some providers make it easy for policyholders to create, retrieve and share COI. There are also free providers. Next also allows you to do so online or via a mobile app.
When do I need an insurance card?
Typically, when insurance is involved in tendering a significant project or contract, it is asked to provide COI. In bidding situations, project managers often require a proof of insurance to be submitted with the bid.
Clients usually want to protect their business, so they ask you to verify your COI. When they see that you have liability insurance, they can trust you have the financial resources to cover claims of damage, injury, or substandard work resulting from your business dealings. As a business owner, you can also request proof of liability insurance from another business you work with.
Examples of when a business owner may need proof of liability include:
- A food truck owner wants to work at a food truck show, but to participate, the food truck must prove that it has at least $1 million in liability insurance.
- A fitness instructor wants to teach in a new studio, but the owner wants to see the COI first.
- A cleaning company owner is bidding for a large commercial contract and the company is demanding COI showing general liability and workers compensation.
- Painters have the opportunity to work on construction projects, but general contractors only work with subcontractors who have their own workers’ compensation insurance.
We recommend that you keep your COI handy. Being able to provide proof of insurance quickly demonstrates a degree of professionalism and credibility that will help your business grow.
When to add certificate holders
Certificates are often required when business owners sign new contracts, apply for professional licenses, or sign commercial leases. In such situations, the agent creates a certificate listing the other party’s name as the certificate holder, and each certificate holder obtains a copy for their records.
If another party has a financial interest in your business, they may need to be at least the certificate holder. maybe. This is a status that gives them some of the protection found in liability insurance.
For example, commercial landlords typically want to be an additional insured in case an injured customer claims damages. Similarly, general contractors may request additional insured status to protect against litigation arising from subcontractor work.
What does a certificate of liability insurance look like
The COI has nine sections that summarize the insurance policies the business owner has, the limitations of each policy, the name of the insurance company, and some other important details.
Having a COI can help protect you in many situations, but understanding the information the COI contains is just as important as the certificate itself. The main sections of the insurance card are:
- Disclaimer: A statement explaining the COI and the intended use of the information.
- producer: An insurance company, broker or agent representing the insured.
- Insured: A named person or entity as described in the policy.
- Insurance companies offering coverage: Insurance companies that provide coverage as described in the COI.
- Scope of application: A description of the specific policy purchased by the insured.
- Description of operation, location and vehicle: Detailed information about business elements.
- Certificate owner: The individual or company to whom the certificate is issued.
- cancel: A description of the insurance company’s cancellation notice requirements.
- Authorized representative: An insurance company, agent or broker authorized to sign the certificate.
Conclusion
A COI is a proof of valid insurance coverage and contains all the important information about the insurance policy your small business has. Most business owners working with the public should have COI on hand. Providing COI, even when not requested, demonstrates a high degree of professionalism and helps win project contracts and bids.