Certificate of Insurance Policy Information
Certificate of Insurance (COI). There are inherent risks involved anytime a contractor works on a client's property. Life is full of risks, and contract work is particularly risky. Contractors may become injured on the job or damage property belonging to the client. When individuals and companies hire contractors to work for them, they want to be assured that any injuries or damage does not end up costing them.
They also want to be assured that they don't have to pay for substandard work. A certificate of insurance gives clients this assurance.
A certificate insurance provides verification of your business insurance coverage. Get a fast quote and your COI now.
Below are some answers to commonly asked certificate of insurance questions:
- How Much Does Employment Practices Liability Insurance Insurance Cost?
- What Is A Certificate of Insurance?
- Why Do Customers Want To See Your Certificate?
- Who Should Ask For A Certificate of Insurance?
- What Do I Need To Know About A Certificate of Insurance?
- How Do You Track Certificates of Insurance?
How Much Does A Certificate of Insurance Cost?
The average price of a standard Certificate of Insurance for small businesses is $0. The COIs are typically provided free of charge from insurance companies and brokers.
What Is A Certificate of Insurance?
An certificate of insurance is a document that's standard in the contracting business. It provides evidence that the contractor has insurance coverage and includes the type of coverage and the limits of the policy. It also lists the dates that the policy is in effect.
Around one out of every 25 claims resulting from errors and omissions involve a certificate of insurance. Around 36 percent of these cases involve contractors who failed to properly identify or add all parties who needed to be insured prior to commencing work. About 21 percent of the cases involve situation where the certificate's holder misrepresented the business' coverage or even claimed to have coverage that is nonexistent.
Why Do Customers Want To See Your Certificate?
The certificate of insurance is important because your company can be held liable if you work with a subcontractor who causes property damage or other damage when working on behalf of your company. Even when you have a contract with the subcontractor spelling out the terms of the contractor, and that contract states that coverage is mandatory, if the coverage actually doesn't exist, then it does your business no good; you're still liable for damage. Proof of coverage from subcontractors is therefore vital.
Who Should Ask For A Certificate of Insurance?
As a business owner, you should seek a certificate of insurance from every subcontractor that you hire. Even among subcontractors that you know and trust, it remains vital that you get this proof of insurance prior to allowing the contractor to conduct business and provide services on your behalf. Each time you hire a subcontractor, even one you've worked with in the past, you should obtain a new certificate of insurance. This can prevent a situation where you absorb risk unwittingly when subcontractors do not have their own insurance in force.
Property owners should also ask for this certificate prior to allowing contractors to work on their properties when hiring contractors, landscapers and others. The reason for this is that:
- It prevents you from taking on risks involved in hiring a company only to find out that the company or its subcontractors have improper insurance or none at all. This protects you from scenarios such as claims that arise if a neighbor's lawn, shrubs, or trees become damaged.
- It ensures that you are not the responsible party if a contractor is injured while working on property you own.
- It provides coverage if the contractor's work is shoddy or incomplete.
What Do I Need To Know About A Certificate of Insurance?
The first thing to remember when looking at a certificate of insurance is to remember that it is that the certificate may not be valid. Forged or false certificates are not unheard of, and the contractor may have allowed the insurance to lapse after purchasing a policy. Best practice dictates requesting the certificate of insurance from the contractor's insurance company in lieu of taking the contractor at his word and assuming the validity of the certificate.
When reviewing a certificate of insurance, look at:
- The name on the certificate. It should match the name of the person or the company that you ire.
- The coverage dates. Make sure the policy is not set to expire prior to the anticipated completion date for the job. If the certificate expires during a job, request a new one.
- The limits on the policy and coverage type. The certificate should provide proof of general liability that protects against damage and worker's comp insurance that pays out if the person is injured while working. The limits of the policy should be sufficient to protect you from personal liability in the event of a major event.
In addition, you should ask to be named as an additional insured during the span of the project. By having another entity add your business as an additional insured that sub contractor is protecting you against their potential negligence.
How Do You Track Certificates of Insurance?
An insurance tracking firm can help you verify coverage throughout the job. These companies also provide notification of expiring certificates so that you don't have to keep track of the insurance and ensure it's in force. An insurance agent is also a good liaison in determining the validity of insurance and reviewing the certificate of insurance to ensure that it protects you from personal liability when working with contractors and subcontractors.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Additional Resources For Small Business Insurance
Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.
- Small Business
- Business General Liability
- Business Liability
- Business Owners Policy (BOP)
- Certificate of Insurance
- Commercial Auto
- Commercial Umbrella
- Comprehensive General Liability
- Directors and Officers Liability
- Cyber Liability
- Employers Liability
- Employment Practices Liability
- General Liability
- Home Based Business
- Independent Contractor
- Liability Insurance Certificate
- Liability Insurance
- Professional Liability
- Workers Compensation Insurance
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.