Have you ever found yourself in a situation where your client asks you for proof of insurance? And you know, producing the policy is not a viable solution. So, what would you do? A certificate of liability insurance is the solution to your problem. But how to get one? And this brings us to our topic, how to get the certificate of liability insurance?
But before we get into all the details, let’s first look at what it is!
What Is A Certificate Of Liability Insurance?
The certificate of liability insurance is a document that carries the details of insurance coverage, policy limits, and the various terms and conditions. This is the ultimate evidence of the liability insurance policy one holds.
And the best part, there is no fee associated with the certificate! All you need to ensure is that the policy is active and updated.
How Do You Request For A Certificate Of Liability Insurance?
When the company issues the policy, they usually issue the certificate along with it. Follow the below steps to get the certificate of liability insurance:
#1: Understand The Coverages
It is important to understand limits and coverages requested by other parties or companies. If the requested limit is higher than the existing limits, then you may need to wait for some time to get a certificate.
#2: Check Your Coverage Limits
To conduct this process, contact your service provider. Inform them about the minimum coverage amount you need. Your broker will get you an insurance liability certificate if the requirements meet. On the contrary, to raise the coverage limits, the broker will need to do the additional paperwork.
#3: Ask For The Certificate
And lastly, As soon as all the adjustments and paperwork are complete, the broker will generate a copy of the certificate and send it to you. You can send this certificate to the client for further collaboration. This certificate can be sent in hardcopy or PDF as per the requirement.
How Much Time Does Issuing The Certificate Takes?
The duration to obtain the certificate of insurance liability can vary. Sometimes, you can be done in an hour or two, while other times, it might take weeks. It is advisable to keep spare time as the process gets lengthy when certificates are created manually or contain mistakes.
What Are The Details on Liability Insurance Certificate?
As per the Acord 25 form, the following details are available on the certificate of insurance.
The Details Of The Insured
It contains the business details you provided at the time of the registration with the state.
This section holds the information of the insurance company and agent of the insured. This part allows the reader to contact the broker to clarify the coverage and other insurance data.
Coverages And Related Information
This allows your client to get a description of the coverage limits of your policies. They can find all the details related to policy types and policy numbers mentioned in the form.
Description Of Operations
This section informs the client about the additional insured status, customized coverage wordings, coverage type, waivers, etc.
This column has the information of the person or company to which the certificate is listed. It also carries the date from which your policy is active.
If you decide to withdraw the policy before the expiration date, it notifies the certificate holder.
This one is easy. This last section holds the name of the insurance company or broker who owns the signatory rights.
How Is An Insurance Policy Different From A Certificate Of Insurance Liability?
We often confuse the policy with the certificate, but both are different as insurance is a contract that covers your risks. However, the certificate of insurance only works as documentary proof of insurance coverage.
For example, Global Corporation takes the tax advisory services of Mr. Paul for a project. The company wants him to issue a certificate of insurance. It is essential to understand that issuing a COI for Global Corporation doesn’t put Mr. Paul under any obligation to cover their losses. It only means that you present all the necessary policy information in a structured form to your client, i.e., the Global Corporation.
Mr. Paul can also add the company under his insurance policy as additional insured with the help of a broker or his insurance company. This way, the Global Corporation will also be protected through Mr. Paul’s policy. How Does Insureon’s Professional Liability Insurance Application Work?
What Is The Need For The Certificate Of Liability Insurance?
#1: Your Clients Will Feel Safer
When companies are aware that the contractor will take responsibility for the damages or injuries occurring on his part, the companies would like to work with him.
Example: A manufacturing company hires a construction contractor for building apartments. Due to some reasons, paint starts peeling from the walls of the flats. Since the contractor holds liability insurance, construction work’s whole damages and losses will be quickly recovered.
#2: A Certificate Increases Your Credibility
Credibility is one of the significant issues when it comes to attracting work. When you are a newbie in the market, it takes immense effort to attract new clients. When you carry an insurance certificate, you can get more contracts.
Example: An architect offers his services to the client. He is new in the market but holds professional liability insurance. Due to this certificate, the client is assured that his money will be recovered in case of any mistakes.
#3: A Certificate Is A Boon For A Renter
Renting out commercial property gets easier when a general liability insurance certificate is involved. When the tenant owns the certificate, he would be saved from any risk against property damage lawsuits.
Example: A person took a property on the rent to establish a restaurant. While setting his furniture, he damaged the floor of the restaurant. This damage would have put that person in trouble, but due to general liability insurance, he could recover the costs of the case.
In A Nutshell…
A certificate of liability insurance is a boon for everybody and anybody who owns a liability policy. It helps you establish that you have a policy, and now you can use it to your advantage. You can win projects, rent properties, and whatnot! A certificate is the ultimate proof of your policy.
This was all about the liability insurance certificate. I hope you found it helpful and informative! And if you have any queries or suggestions, please drop them in the comments below. I am all ears!