Chances are you have just bid on a contracting job and you are now taking the necessary steps to get started on that job. In most states, one of those steps includes obtaining a certificate of insurance (COI). This step seems like a lot more of a hassle than it truly is. If you have the right insurance agent by your side and the general liability coverage you need to stay safe, you can increase your chances of keeping the job you just bid for, as well as increase your chance of getting jobs in the future.
It is in your best financial interest to obtain a COI early in the bidding process, but it’s understandable that many in your position have had some questions about these documents. Here are the basic things you need to know about proper insurance coverage and the necessary documents that go along with it, complete with answers to frequently asked questions on the subject.
Why Do I Need a Certificate of Insurance?
These documents are proof that you possess liability insurance, as well as any additional insurance coverage policies your company might have or need by law. State and local laws in your area might not require any sort of insurance policy. That said, having a certificate of liability insurance shows your customers that you are professional enough to think about the risks associated with your business and how they might affect your clients. Therefore, the answer to this question will differ according to where your company operates out of. In some cases, a COI might be a legal requirement. In others, a COI is a sign of professionalism.
What do Certificates of Insurance Look Like?
This proof of insurance is typically drafted onto a simple paper document which lists basic information about your company and your insurance policy. Some of the information included on this includes:
- What insurance policies you have, like general liability insurance, commercial auto insurance, and workers’ compensation insurance
- Who is covered, including staff members, key personnel, clients, and third parties covered by your policies
- Any additional insured on the policies
- Proof of compliance with federal regulations
- The name, phone number, and key information about your insurance company
- Effective policy dates, policy numbers, or other information that varies from policy to policy
These pieces of paper are presented at the time of bidding, or shortly thereafter, as a way of proving you have insurance coverage. This may also be presented to any government employee or government agency who audits you to make sure you’re following regulatory law.
How Do I Know My Certificate of Insurance Has All the Necessary Information?
Let’s say you have a general liability policy or a workers’ compensation policy and you’re worried that your COI might not have all the information you need to follow state and local laws or the wishes of your clients. Rest assured that your insurance company understands your state and local laws in relation to your insurance coverage. They will be able to create a document which reflects this knowledge.
When Should I Expect to be Asked About a COI?
Certificates of Insurance are requested as a rule of thumb, so unless you are doing a job for a friend or family member, chances are high that you will be asked for proof of insurance. This is especially true if you plan on working in a big city like New York, if you plan to work with a research institute or similar public service, or if you’re taking on a government contract. Because these entities have a high number of third parties who visit the sites or structures your contracting agency will be working on, the chances that they will suffer from an accident are high as well. These people need to know that you are willing to take extra precautions to maintain their public image, as well as the safety of your clients.
If you have lingering questions about proof of liability insurance, contact ContractorsLiability.com to work with an insurance agent on getting the proper coverage for your company!