Any time you enter into an agreement with a business or partner, they may want to check that everything is shipshape.
What Is a Certificate of Insurance? - If you own a business, chances are you have certificates of all kinds on your wall, whether they be your hard-earned college degree or the certification needed by your city to run your business. These certificates prove that you’ve passed your classes or have met the requirements set out by the city. A certificate of insurance is similar. A hundred years ago, business may have been done with the power of a handshake, but today everyone wants to see receipts.
And the easiest way to prove you have insurance coverage is with a certificate of insurance (COI). These certificates are sometimes called proof of insurance, insurance certificate, subcontractor certificate of insurance, and certificate of insurance form. No matter what you call it, this document is important for both business owners and subcontractors to show compliance with workers’ comp rules.
Compensation insurance coverage
Whenever you need this information, it’s all in a handy spot for you to reference
What Does a Certificate of Insurance Typically Include? - Your certificate of insurance lists the name of your policyholder, the type of insurance you have, your policy number, the policy period, and more. Whenever you need this information, it’s all in a handy spot for you to reference.
Why Might a Business Need a COI? - In many states, most businesses, with a few exceptions, need to carry workers’ compensation insurance coverage for all eligible workers, which includes part-time workers. In most states, even if you have just one employee, you need to pay for workers’ comp. If you don’t carry workers’ comp in states that require it, you could face hefty penalties and be open to lawsuits if someone is injured on your worksite. Worse, some businesses you work with may also face legal problems, which is why they want to make 100% sure you have the right workers’ comp insurance.
Right insurance coverage
Why Ask for a Certificate of Insurance? - Any time you enter into an agreement with a business or partner, they may want to check that everything is shipshape, and that means making sure you have the right insurance coverage. When you act as a contractor or you enter into an agreement with another business, the other company will likely want to see a certificate of insurance to make sure you’re covered.
They might want to see your certificate of insurance or some proof of insurance
If you place bids on public works and government projects, you’ll usually need to show you have coverage already in place by submitting certificates of insurance with your bid. You may also need a COI if the workers’ compensation board in your state thinks you might not have workers’ comp insurance. They might want to see your certificate of insurance or some proof of insurance. Even some auditors might want to see COIs along with your other financial documents.
Workers’ comp coverage
When Do Subcontractors Need to Provide a Workers’ Compensation Certificate? - If you work in a state where subcontractors need workers’ compensation for themselves and their workers, you might eventually be asked to show a COI. Your workers’ compensation certificate shows you’re compliant.
Even if you’re a subcontractor in a state where you’re not required to have workers’ comp, some clients or suppliers still ask you to have that coverage. Government entities and companies sometimes look to reduce their own liability by asking independent contractors and subcontractors to carry workers’ comp coverage. You might be asked to show a certificate of insurance before you sign a contract with a supplier, business, or any entity with this requirement.
Lower risk of legal action
Before you get a workers’ compensation COI, you first need a policy in place
If you’re a business working with an independent contractor or subcontractor, you may want to ask to see proof of their insurance. If the contractor is injured at your business and it turns out they did not have insurance, they could file a claim against you to help pay for their injuries. With insurance, their injury costs are covered and you face a lower risk of legal action. Win-win.
Where And How Do I Get a Certificate of Insurance? - Before you get a workers’ compensation COI, you first need a policy in place. To get that, look for an expert worker’s comp carrier. Check reviews and compare to find a company that has extensive experience in the industry and has worked with businesses like yours. You’re seeking a reliable carrier who’ll be there for you when you need them. Once you’ve got an insurance provider you want to work with, it’s time to get coverage. From there, you can ask your carrier for a certificate of insurance.
Paying insurance premiums
What Does a Certificate of Insurance Cost? - Good news: if you have an insurance policy in place, it doesn’t cost anything to request or get a certificate of insurance. It’s part of the job of an insurance company, agent, or broker. You’re paying insurance premiums for the insurance but will not pay an extra fee to get a COI.
The only other time money might come into the picture is if you realize you don’t have the insurance or the coverage a business partner or bid needs. If that happens, you might need to buy a rider or even change your policy to meet the requirements. How much it costs will depend on what coverage you need.
