How to Read an Insurance Certificate Form

When a new client hires your firm, they want to know that working with you won’t put them in more legal trouble. Similarly, you want confidence that engaging vendors or subcontractors for your business would not harm you financially.

What can both sides do to alleviate their concerns? Obtaining a liability insurance certificate from an insurance company.

A certificate of insurance (COI) is a document that proves insurance coverage. You or your company is listed as the policyholder or designated insured. The form also describes the type of liability insurance covered, the policy limits, and the policy period’s effective dates.

When do certificates of insurance become necessary?

In the corporate environment, insurance certificates are widely used. Certificates of insurance play a crucial role whenever parties to a transaction are concerned about losses and legal liability – something that most small businesses are concerned about.

COIs are required in the following situations:

  • A landlord needs to know if a tenant has commercial general liability insurance, which protects against common business risks. The landlord wants to ensure that if a client trips and falls on the landlord’s property, the tenant’s insurance coverage will cover the costs of a lawsuit for both the tenant and the landlord.
  • Before starting a facility renovation, a manufacturer needs a contractor’s letter of intent. The owner now knows that they will not be responsible for any structural damage caused by the remodeler.
  • A construction design firm wants to protect itself from the dangers of inviting subcontractors onto its job sites. Obtaining proof of insurance reduces the danger of having to pay the medical bills of any injured subcontractor workers.
  • Before beginning a road building project, a municipal authority requests a COI from an engineering firm. If the engineering firm generates a flawed design, the municipality is protected from liability.

What are the essential sections of an insurance certificate?

Most insurers, agents, and brokers utilise a standard form developed by the Association for Cooperative Operations Research and Development (ACORD), a nonprofit insurance organisation. It’s also known as the ACORD 25 or an ACORD certificate of insurance. This COI template includes the following:

  • The date the form was created.
  • The certificate is a representation of your coverage, not the actual insurance policy, according to the legal wording.
  • The insurance agency or broker who issued the certificate is known as the producer.
  • The name and address of the person(s) or business that the insurance covers.
  • General liability, professional liability, commercial auto, umbrella insurance, and workers’ compensation are examples of insurance coverages. In this area, you’ll find policy numbers as well as their effective and expiration dates.
  • All companies that provide the coverage listed above are considered insurers.
  • Coverage limits: The amount of coverage each policy provides in dollars, along with coverage subcategories.
  • Operational details, locations, and vehicles: A general response field for requests such as being added as an additional insured.

How to Obtain an Insurance Certificate

After you purchase a policy or request a replacement certificate, some insurance companies will mail you a certificate. Approximately 80% of business owners can acquire their certificate within hours of starting an application with Insureon. Even the most difficult-to-insure businesses may usually acquire a certificate within 48 hours.

The process with Insureon begins with a free online application that takes only a few minutes to complete. You’ll get free quotations from top-rated US carriers that you can compare on your own, or you can talk to a qualified Insureon agent to make sure you have the right coverage.

You can download your certificate as soon as your policy is issued after choosing and paying for it.

How to Examine an Insurance Certificate

When you request a certificate of insurance from a person or a firm, you should carefully review the form. Here’s what to check for when you get it:

  • Make sure the company name on the form corresponds to the vendor you’re employing.
  • Check that the policy’s expiration date does not coincide with the project’s completion date. If it does, request another COI from the vendor confirming the policy’s renewal.
  • Make that the company has at the very least a general liability policy and workers’ compensation coverage. These policies will cover you for any third-party losses (property damage, bodily injury, etc.) caused by the vendor, as well as any injuries to their personnel while working on your project.
  • Check to see if the vendor’s liability limitations are equal to or more than your own. Consider compelling the person to acquire additional insurance if they don’t.

Business owners will occasionally provide fake COIs because they cannot afford to maintain actual insurance. Request the COI directly from the person’s insurance agent or broker if you have any reason to question them.

Is an insurance policy the same as a certificate of insurance form?

A certificate of insurance, on the other hand, is merely a statement of existing insurance coverage. When you hand up your COI to a customer, you’re not agreeing to cover that person’s losses. You’re simply demonstrating that you have insurance.

Make your customer a “additional insured” on your policy if you want to extend coverage to the certificate holder. This is a simple process. Simply contact your agent or broker and request that your declarations page be amended to include your customer’s name.

Insureon gives you access to your insurance certificate.

Insureon offers a simple online tool for comparing business insurance quotes from top-rated carriers around the country. With Insureon’s Customer Portal, you may download your certificate of insurance or request one from your carrier after you’ve purchased a policy. Start an application today to compare insurance prices for your company.

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