10 Questions About Certificates of Insurance Everyone Should Ask
A fundamental of the insurance industry is ‘Certificates of Insurance’. At its essence, they are Proof of Insurance, although there are many nuances to what a certificate does and why.
In this article, let’s explore the most common questions surrounding Certificates of Insurance.
Does A Certificates Of Insurance Show How Much is Covered by the Insurance Policy?
Yes. Certificates of Insurance provide:
- The policy number and the producer
- The type of coverages
- The limits of the coverage
- The Insured’s name
- Policy expiration dates
The information the Certificate of Insurance supplies should be easy to find and understand. It is important to note that they are not an insurance policy, it only certifies an insurance policy exists to protect the insured.
How Much Does a Certificate of Insurance Cost?
Nothing.
Insurance Carriers should be supplying their insureds Certificates of Insurance for free. (If your carrier uses Accord Forms, the certificate will change slightly depending on the coverage.)
When a Certificate of Insurance is required, do not hesitate to ask for one! It does not cost anything to request one, and having accurate, up-to-date COI’s saves time and money in the long run.
Should insurers issue “Blank” or “Sample” Certificates of Insurance?
No. Most guidelines recommend against doing this.
Why are Certificates of Insurance even Necessary?
Certificates of Insurance provide:
- Proof of Insurance
- An overview of the policy & liability reduction
In short, Certificates of Insurance are an extra layer of protection against liability and potential litigations.
Certificates of Insurance show proof for general Commercial Liability, Workers’ Compensation, as well Auto Liability coverage certificates. Moreover, they provide relevant expiration dates, policy limits, and other important information.
How do I Review a Certificate of Insurance?
- Names
Be sure the name on the certificate is an exact match for the name of the insured - Dates
Make sure coverage will be in place for the entire duration of the project. If coverage is set to expire, make a note so you can request a renewal. - Coverage
The Certificate of Insurance must be for the correct type of coverage and the right coverage amount.
When Should I Request a Certificate of Insurance?
Request a COI before signing an agreement to work together. Contractors and independent workers should show Proof of Insurance using a Certificate of Insurance.
How to Get a Certificate of Insurance?
If you receive a request for a Certificate of Insurance, contact your insurance agent. You should receive it within 24 hours.
If you are requesting the certificate, you must send over a request to the COI and your vendor will provide it. (Here, a COI Tracking and Management tool is essential.)
How Long to Keep Certificates of Insurance?
Insurers should keep Certificates of Insurance indefinitely, a claim can arise anywhere down the line!
If this is not possible, check and follow your industry standard.
Why do I Need to Collect Certificates?
A Certificate of Insurance proves that a vendor, subcontractor, tenant, supplier, etc., has the correct coverage and for the right amount.
Collecting insurance certificates ensures that everyone you work with is correctly insured. Moreover, it guarantees that their claims can be subrogated.
Why Should my Business Collect the Certificates of Insurance of our Contractors?
You should collect your Certificates to:
- Ensure vendors have the proper coverage in place.
- Keep your premiums low by assuring those you work with have their coverage.
- Protect your business against expensive claims.
To learn more about how to manage, collect and issue Certificates of Insurance request a demo with SmartCompliance
