A certificate of insurance (COI) is a document that serves as proof of business insurance. It contains all of the most important details of your insurance policy and helps protect against third-party risk. Anyone who owns or operates a business can (and probably should) carry a COI.
Also known as a certificate of liability insurance or proof of insurance, a COI lets your clients know that you have adequate insurance coverage before they begin working with you.
Issued by your insurance broker or insurance company, this document verifies you have commercial coverage in place and provides a summary of that coverage.
Similar to an auto insurance card, a COI is physical proof of your coverage. Your certificate of insurance will display information regarding:
- Policy holder name and mailing address
- Type of policy/what is covered
- Description of the type of work the insured performs
- Policy numbers
- Effective dates of the policy
- Coverage amounts and policy limits
- Contact information of insurance company
Who Needs a Certificate of Insurance?
If you own or operate a business in Arkansas, especially if your business performs and provides a service, you need a certificate of insurance.
In small-town Newport, Arkansas, M&P has been in business since 1925 and is dedicated to being your one-stop shopping point for all things insurance. Learn more at https://t.co/BH6bonea07 #ArkansasLife pic.twitter.com/qyiB8uhu4a— M&P Insurance Services (@MPInsuranceSer1) July 29, 2020
Regardless of the level of risk of liability, it is a good idea to carry a COI.
Without it, it may be challenging to secure contracts and clients.
Why Do I Need a Certificate of Insurance?
It is not surprising or uncommon for a client or potential client to request to see proof of insurance before allowing you to begin a project.
If you are bidding for a project or applying to work on a job with specific liability concerns, your partner or client might request proof of insurance.
A COI is an easy way to verify you have adequate insurance coverage in place, and it offers your clients or business partners peace of mind before they decide to do business with you.
Additionally, if your business rents an office space, your landlord may request to see your COI before signing the lease.
How Do I Get a Certificate of Insurance?
Carrying around extensive insurance documentation isn’t convenient or secure.
A COI is compact, easy to carry around documentation that can increase a client’s confidence in your business.
Not only that, COIs are quick and easy to obtain, and free of charge. Almost all insurance companies will provide you with a Certificate of Insurance upon request.
When requesting your COI, there are a few things you need to know:
- Double check with the individual who has made the COI request as to what policy minimums or limits should be in place.
- If possible, obtain the name, address, and tax identification number of your client, in case you need to increase your premium. Having this information saves you from facing unwanted delays or being refused a job due to insignificant coverage.
- Confirm with your insurance broker that your current policy meets coverage requirements for the project you’re about to begin. If your policy already meets these needs, your broker will contact your insurance carrier to get a COI issued. If you need to increase policy limits or purchase a commercial umbrella policy to extend certain liability limits, your insurance broker will be able to provide you a quote.
Once all of the above have been addressed and confirmed, your insurance broker will create a Certificate of Insurance and mail a printed copy of your COI. Upon receipt, you will usually be required to mail the COI to your clients in order for them to verify your coverage.
This process sounds fairly straight forward, but can take anywhere from a few days to a couple of weeks to complete.
If you’re able to reach your insurance broker quickly and they complete your paperwork expediently, the process will go faster.
If you use a number of insurance carriers for your commercial insurance needs, this can prolong the process.
Should I Ask My Contractors and Suppliers for a COI?
Contractors or suppliers you work with should be prepared to show proof of insurance, just as you should be prepared to show your clients proof of insurance when requested.
In order to make sure the companies or individual contractors you work with have proper coverage in place, you need to request to see a COI.
Here are a few important things to do when checking a contractor’s certificate of insurance:
- Contact the listed agent/insurer on the COI for authentication.
- Ensure coverage limits are adequate.
- Confirm expiration and effective dates of coverage.
- Make sure the individual business, contractor, or subcontractor name on the COI matches exactly to the company you are doing business with.
- Keep a record of the time and date of any calls made, as well as a record of with whom you spoke.
Having a COI can make it easier to secure clients and begin working on a project.
If you can’t immediately show proof of adequate coverage, a potential client will likely look to the next candidate, as they will not want to take a risk in the event that something happens.
When you purchase your insurance, you will most likely be issued a COI. If not, request it!
If you wait until you are asked to provide a COI, and you don’t have one already, you could miss out on a project and potentially lose revenue for your business. This is especially true if the process of obtaining your COI takes longer than expected.
Having a COI at the ready increases your chance of winning your next client or bid.
Contact Us Today!
If you are in need of business insurance or a Certificate of Insurance for your existing coverage, we can help!
At M&P Insurance, requesting a Certificate of Insurance is easy and we work to complete your request quickly.
Contact us today!