The certificate of liability insurance is a document that proves you have general liability insurance coverage. It is also known as a proof of insurance or ACORD 25.
- Limits and amounts of coverage
- Company that insures you
- Named insured on the policy
- Date of effective policy
Certificates of liability insurance are available online after you purchase a general liability insurance policy.
It is essential for your business to have general liability insurance, also known as commercial general liability insurance or business liability insurance. It helps to cover claims that your business caused bodily injury or property damage to others’ belongings. It can also help cover claims against your company for libel and slander.
What are the reasons I might need a certificate of general liability insurance?
Small business owners may need a certificate of liability insurance for a variety of reasons, including:
When a client agrees to work with your business, they’ll want to know you have the right kind of insurance coverage to complete the project.
If you rent space for your business, your landlord may want to make sure you have professional liability insurance to protect you from claims.
Certain professionals, such as real estate agents, are required to carry general liability insurance.
COIs (Certificates of Insurance)
The certificate of insurance (COI) is used for proving insurance coverage in situations where liability and significant losses are of concern.
The certificate of insurance is usually provided by the insurance company when you purchase liability insurance for your business or contractor.
It is difficult for businesses or contractors to win contracts without a COI. The client wants to know that if a business owner or contractor is responsible for damage, injury, or substandard work, the client will not assume any risk. Because many companies and individuals hire contractors, the client wants to know that the business owner or contractor is insured.
The process of validating an insurance certificate
The client should confirm that the name of the insured on the certificate is an exact match to the company or contractor they are considering. It is typical for a client to request a certificate directly from the insurance company rather than the business owner or contractor.
If the policy is set to expire before the contracted work is completed, the client should obtain a new certificate.
An insurance certificate’s details
Different types of liability coverage are listed separately on insurance certificates, including general, auto, umbrella, and workers’ compensation. Generally, “insured” refers to a person, company, or policyholder listed on the insurance certificate as being covered.
The certificate also includes the name and address of the policyholder, as well as information about the insured’s operations. In addition to the address of the insurance company issuing the policy, the contact information for the insurance agent or agency’s contact person is included as well. If several insurance companies are involved, all names and contact information are included.
Clients who request COIs become certificate holders. The client’s name and contact information appear in the bottom left-hand corner along with a statement about the insurer’s obligation to notify the client if the insurance policy is canceled.
The certificate briefly describes the insured’s policies and limits for each type of coverage. As an example, in the general liability section, the six limits are summarized by category and a determination of whether coverage applies per claim or per occurrence is provided. The workers’ compensation coverage will not show a limit since state laws determine the benefits provided to injured workers. However, an employer’s liability coverage limits should be listed.
Certificate of Insurance: How to Get One
Contractors or businesses should be able to provide you with proof of insurance either by retrieving it from their insurance company or by providing you with their insurance company’s contact information, so you can request that it be sent directly to you. If you request a Certificate of Insurance from your vendor, be careful. There have been cases of contractors submitting fraudulent certificates.
What is the purpose of a Certificate of Insurance (COI)?
If you are hiring an independent contractor or business to do work on your property, you should require a certificate of insurance (COI). If you are a contractor or business, you should have a COI so you can prove your insurance to your clients.
What is the validity period of a Certificate of Insurance?
Usually, a COI is good for five years. Keeping a copy of your Certificate of Insurance indefinitely is important, because you never know when a problem may arise when you perform a job on your premises or for someone else. Keeping a copy of the Certificate of Insurance will enable you to resolve any issues in the future.
What is the best time to get an insurance certificate?
If you have a written contract, it should include insurance requirements, including coverage and limits required that are verified with a certificate of insurance.
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What is the fastest way to get a certificate of liability insurance?
Please contact your insurer if you require a certificate of insurance for the purpose of fulfilling a contract requirement. When you purchase small business insurance from Hiscox, a certificate of insurance is included in the documents you receive upon purchasing your policy.
Liability Insurance
If your liability insurance policy covers claims that fall within the scope of your coverage, this is known as commercial insurance. Liability insurance comes in three forms, and the type you choose depends on the details of your business.
In general liability insurance, also known as commercial general liability (CGL), your business is protected against claims of bodily injury, medical expenses, and property damage from another person or business.
A professional liability policy, often called errors and omissions insurance (E&O insurance), covers another person’s claims against a professional or personal service provider.
A business owners policy (BOP) combines general liability and business property coverage.
The article was updated on July 18th, 2019 to include specific details about how COIs are issued by Hiscox to customers and refer to current certificates of liability information.
The Bottom Line
You may need a Certificate of Insurance (COI) in a number of situations. The client may request the COI directly from your insurance company to confirm your insurance coverage. You should get a Certificate of Insurance from the contractor’s insurance company even if you have worked with them before, since their coverage may have changed.
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