Guest Blogger: This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.
Everything A Contractor Needs To Know About Certificates of Insurance
When hiring a contractor, many consumers are extremely cautious – especially those who have fallen victim to a shoddy repair job or other construction problems. That's why you should offer assurance that you’re a trustworthy, reputable contractor who won’t leave clients in a tough financial situation. How? Make it easy for potential clients to verify your responsibility for your work and your employees by providing a certificate of insurance with proof of valid coverage.
What is a Certificate of Insurance?
A certificate of insurance is the document issued by your insurance company that certifies you are covered by a valid insurance policy. Here are the most important features a customer will look for on your certificate:
- Your policy number and the named insured
- The effective date of the policy and the expiration date of the policy
- The types of insurance coverage purchased
- Dollar amounts of applicable liability
In broader terms, your Certificate of Insurance helps your customers understand what will and won’t be covered before you begin construction on their properties.
How do they work?
A Certificate of Insurance is easier for your client to acquire than it would be for them to see your actual insurance policy. It also provides the information they’ll need if they do need to file a claim without divulging any of your confidential information such as payroll and sales figures.
It’s important to note that your certificate is not a substitute for your policy itself. You are responsible for requesting the proper information on your certificate (see the bullets above).
Obtaining your Certificate of Insurance could also help you sell jobs if you’re able to produce a copy with your proposal. Customers are much more likely to choose a trustworthy contractor who offers information upfront as opposed to one who is unable or unwilling to provide valid credentials or who waits until the information is requested.
How do I get my Certificate of Insurance?
All you have to do to secure your Certificate of Insurance is contact your licensed insurance agent, make sure you are actually insured with a valid policy, check that you’ve got the coverage you need and request a certificate. You may even be able to view certificates online and print multiple copies as needed.
What does “additional insured” mean?
“Additional insured” is an option to add coverage for another party to your policy. For example, your client will likely request to be listed as an additional insured in order to defer liability for any accidents or injuries that occur on their property during your project. If you’re a contractor working with subcontractors on the same project, you may also add a named insured since you share joint liability to pay workers’ compensation if an employee is injured. However, the primary policyholder will remain fully responsible for covering the premium payments.
Remember, it’s best to be upfront and honest with your clients in order to document that you’re running a trustworthy contracting business. If you have any questions about your contractor insurance coverage or your Certificate of Insurance, contact your licensed agent and make sure you’ve got everything you need to prove to your clients that you’ll get the job done right.
Knowing you're prepared for a problem can give clients the assurance they need that there won't be any. Wear that assurance like a badge by providing your Certificate of Insurance upfront to potential clients. It could give you a big edge over your competitors.