What business owners should look for when reviewing certificate of insurance forms.
A certificate of insurance form is a document that businesses use to show proof of insurance. This document lists the business’s liability insurance policies, their coverage limits, and the dates during which their policies are effective. When a contractor is able to produce a certificate of insurance, it offers your peace of mind knowing that they have enough coverage to cover any issues related to their work. This ensures that your business will not be responsible for such claims. But how can you ensure that a contractor’s certificate of insurance is legitimate? Here’s what you should look for when reviewing these documents.
What’s on a Certificate of Insurance?
While certificates of insurance can take different formats depending on the company that issues them, the same kind of information is typically included in all forms. When reading certificates of insurance, look for the following:
- The date that the form was issued.
- A disclaimer summarizing the nature of the certificate.
- The agent or broker who issued the certificate.
- The name(s) and address(es) of the business or people covered by the policy.
- A list of the insured’s commercial coverages. Usually, this includes general liability, commercial auto, commercial umbrella, and workers compensation insurance. This portion will also show policy numbers, the dates that the policies are effective, and the expiry dates of the policies.
- All the companies providing the stated coverage.
- The dollar coverage limit that each policy provides broken down by coverage subtype.
- A spot where additional insureds can be listed.
- The person or company that the certificate was issued to.
- A notice that states that the certificate holder will be notified if the insured cancels a policy before the expiry date.
- The signature of the agent, broker, or a representative verifying the legitimacy of the certificate.
How Do You Read a Certificate of Insurance?
When you read through a certificate, you should look for specific things. To start, you should make sure that the name on the certificate matches the name of the contractor. You should then verify that the policy expiration date does not happen before the contractor’s work is scheduled to end. If it does, then you will need to request another certificate confirming the contractor’s policy renewal. When looking through the listed coverage, you should verify that the contractor has general liability and workers compensation insurance. These coverages ensure that third-party loses related to the contractor’s work, and any injuries sustained by the contractor’s employees will not fall on your shoulders. Finally, you should make sure that the contractor’s coverage limits meet or exceed the limits of your own insurance. If they do not, request that they secure additional coverage. This ensures that they do not run out of coverage and turn to you for assistance.
This is what you need to know about certificates of insurance. Do you have additional questions about your commercial coverage? If so, then contact the experts at East End Insurance Agency. We are ready to assist you with all your business insurance needs today.