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Certificate of Insurance 101

Certificate of Insurance 101

Having a certificate of insurance is very important as a small business owner and provides a sense of reliability to your clients. You may have recently built a relationship with a new client and are excited to begin the job; however, if you don’t have proof of your commercial insurance, or other coverages for that matter, then the job could get held up or cancelled. 

What is a certificate of insurance?

So what is a certificate of insurance exactly? Think of it like an auto insurance ID card, but for your business insurance coverage. It is a document that business owners can (and should) carry around that is issued by your insurance company and verifies the coverages you have on your insurance policy for your small business. It specifies whom your insurance covers, the effective date of the policy, and other details  such as the dollar amounts of your limits and deductibles. In short, a certificate of insurance summarizes your policy for your clients and customers to review, and to legally verify that you are suitable to safely handle their work.

Additionally, a certificate of insurance can be requested when a liability or large loss is a concern. It helps provide proof that certain liabilities will be covered during a job and it is not uncommon or unsurprising for a client or potential client to either request a copy before you begin work, and/or to contact your insurance agent to ensure that your certificate of insurance is authentic. Having the right insurance, and the right proof of insurance, will keep both you and your client free from worry and help start your relationship on a positive note. 

An example of a certificate of insurance.

Even if your clients don’t request a certificate of insurance up front, it can still be a “selling point” for your company when developing new business leads. We always recommend that our commercial clients mention all the great products or services they have, while then also offering the proof of insurance up front to let their clients know that they are the right professional for the job.

As a homeowner, when should I ask to see a certificate of insurance?

Whenever you are hiring someone to perform a service on or inside your home, we recommend requesting to see their certificate of insurance. We also recommend double-checking its authenticity. A quick call to the insurance agent associated with the certificate can help ensure that if an accident occurs, the contractor has the necessary coverage to pay for it. As the old saying goes — it’s always better to be safe than sorry!

Two people viewing paperwork.

Get your certificate of insurance today

If you’re a business and are not carrying your certificate of insurance yet, or if you are unsure if you need one, don’t worry. We’ve got you covered. Contact Stephanie or Ross in our commercial lines department today, and they will be happy to assist you in protecting your business. 

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