9 Things You Need to Know About Certificates of Insurance
Certificates of insurance (COIs) are confusing, especially if you’re just starting or don’t have a system in place to track them.
In this post, we’ll answer nine common questions people have about insurance certificates, helping make you more knowledgeable on the subject, and give you ways to increase your company’s compliance.
1. What is a COI?
A certificate of insurance is a single-page document issued by an insurance provider that supplies all the essential information from an insurance policy. This document is verification that the named insured is in fact insured and is often requested by opposite parties doing business with one another.
By requesting COIs from vendors, subcontractors, tenants, etc. it assures they have the correct coverage, exposure to risk is reduced, and there is protection in place against third-party liability.
2. When Should I Request a Certificate of Insurance?
A COI request should be sent any time two contracting parties sign an agreement to do work together. If a contract happens to already be in place, but no certificate of insurance has been received or requested, one should be requested at once.
3. How to Get a Certificate of Insurance?
If you have a commercial liability insurance policy and receive a request for a certificate of insurance, all you have to do is contact your insurance agent and you should receive a COI within 24 hours.
If you are the one requesting the certificate, having a system in place to track your COIs makes collection as easy as clicking a button! All you have to do is send over a request for the COI, and your vendor will upload it straight into the system.
4. How Much Does a COI Cost?
The average price of a certificate of insurance is $0! This means that when a COI is needed, there’s no reason to hesitate to ask for one. It doesn’t cost anything to request one, and having accurate, up-to-date COIs saves time and money in the long run.
5. Who Needs to Collect COIs?
Business owners, contractors, property owners, and landlords should request COIs from every vendor, subcontractor, or tenant they work with or lease to. This even holds for vendors you have worked with before and know you can trust.
6. Why do I Need to Collect Certificates of Insurance?
A certificate of insurance is a document that proves a vendor, subcontractor, tenant, supplier, etc. has the correct coverage, and it’s for the right amount.
Collecting insurance certificates ensures those you are doing business with have their own coverage, and any claims that arise can be subrogated.
You should collect COIs to:
- Ensure vendors have the proper coverage in place.
- Keep your premiums low by assuring those you work with have their own coverage.
- Protect your business against expensive claims.
7. What Should I Look for When Reviewing a COI?
- Make sure the name on the certificate matches the name of the person you are working with.
- Assure coverage will be in place for the duration of the project. If coverage is set to expire, make a note so you can request a renewal.
- Assure the COI is for the right type of coverage and the correct coverage amounts are met.
8. How Long to Keep Certificates of Insurance?
In a perfect world, a COI should be kept forever because a claim can arise anywhere down the line. If this isn’t possible, check and follow your industry standard.
9. How Can I Keep Track of COIs?
The best way to collect and track certificates of insurance is with a COI tracking software. SmartCompliance, the leading COI tracking software, allows you to upload or have your vendors upload COIs with the click of a button, search for and filter COIs, and ensure compliance is met by sending auto-notifications when COIs are missing or about to expire.
If you’re interested in increasing compliance and easily storing and tracking certificates of insurance, schedule a free product demo today!