Certificates of insurance! In every business, there is paperwork. Whether you are self-employed, run a small business, or work as a contractor, you’ll probably be stacking up all kinds of paperwork. From tax returns to invoices, there are loads of paper trails to keep track of.
One of these types of paperwork you’ll likely already have – and should have if you don’t already – is a certificate of insurance. In this article, you will learn everything you need to know about certificates of insurance, what they are, and why they are so essential. So, if you’re any kind of business owner, read on for the 6 things you should know about certificates of insurance.
What is a Certificate of Insurance?
Let’s start with the basics; what is a certificate of insurance? Quite simply, as explained by the insurance specialists over at https://www.icnj.com/blog/what-is-a-certificate-of-insurance/, COI is essentially a form your insurance agent or company provides you to verify you have insurance. That’s it! A certificate to show you have insurance.
These documents do not alter or change your policy, instead, they simply prove that you have a policy. Sounds simple right? Well, that’s because it is! By the time you are looking at a certificate of insurance, it means the hard work is already done and you are adequately insured. Let’s dig a little deeper into a COI, what it should include, and why they are important.
What Should it Include?
A certificate of insurance is not an in-depth look at your insurance policy – you will find these details in your policy schedule or other paperwork provided by your insurer. However, they do include a few key points that you need to make sure are on there.
Firstly, it should include the name and contact details of your insurance provider. Then, it should have a brief overview or title of your policy, along with the dates that your insurance is valid to/from. On top of that, your coverage amounts and company details should be included. Other than that, no other details are required on a COI.
How to Get One
Many policy providers will include a certificate of insurance. However, if they don’t, you can simply request one directly from your insurer. They will deal with you directly and either digitally or physically send you a certificate. Once you have one, you can display it, duplicate it, or store it somewhere safe.
They Should Usually Be Free
Luckily, most insurers provide policy certificates free of charge. These documents are easy to produce and verify, so there should be no extra charge for doing so. They will have a simple template that they can modify to include your policy information. If your insurer does charge you for a certificate of insurance, the fee should be very minimal. It is unusual for an insurer to charge more than a few dollars for such a document.
Who Will Need to See Yours?
So, why might you need a COI? Depending on your type of work, it may be necessary to produce many copies of a COI for various people. For example, if you are a freelance contractor or any other freelance specialist, the person hiring you needs to know that you are insured before they let you work on their site. If you are uninsured, you risk causing them issues, both legally and financially.
On the other hand, you might need to see other company’s certificates of insurance. If you use vendors, suppliers, or have tenants in commercial properties, you need to ensure that they are adequately insured. If you don’t, any faults may fall at your lap and cost you dearly.
How Long Should You Keep COIs?
Finally, what should you do with your certificates and how long for? Ideally, you should keep them in a safe place – either digitally or physically – forever. Many insurance claims are taken retrospectively, meaning that someone may come chasing you for a certificate of insurance from many, many years ago. You may have changed policy or provider during this time, but so long as you have proof of your original insurance, you’ll be able to use that policy. Therefore, it’s vital to make sure you have copies of all your insurance policies and their certificates from your time in business.
These 6 things are the crucial pieces of information you need to know about certificates of insurance. If any of these things apply to you, then make sure you’re getting hold of a copy of your COI and putting it in a safe place. You never know when you might need it.