
A Certificate of Liability Coverage is a document that proves a business has the necessary insurance to cover potential lawsuits. It's often required by clients, vendors, or partners before they'll work with you.
This document typically includes the business's name, policy number, and the types of coverage included. For example, a certificate might list "Liability Coverage" and "Umbrella Coverage" as the types of coverage included.
Businesses need a Certificate of Liability Coverage because it provides proof of insurance to third parties. This can help establish trust and credibility with clients, vendors, or partners who require it.
In the event of a lawsuit, a Certificate of Liability Coverage can help protect a business's assets by specifying the limits of coverage. This can include the amount of money the insurance company will pay out in the event of a claim.
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Obtaining a COI Document
To obtain a certificate of liability insurance, you'll need to have a liability insurance policy in place. You can get this policy through a commercial insurance provider, and some companies, like Tivly, can help match your business to an insurance provider that suits your needs.
If you already have a liability insurance policy, you can usually obtain a COI document for free. Some insurance companies, like NEXT, even offer unlimited COIs at no additional cost with your policy. You can also print off additional copies directly from the insurance company's website, although some companies may charge a small fee for extra copies.
To get a COI document, you'll typically need to contact your broker or insurance agent to request they create and share your certificate of insurance for each request. However, with some insurance providers, like Thimble, you can easily share your COI with clients quickly using their app, email, or text messaging functions.
Before sending a client your certificate of liability insurance, make sure to check a few things. Ensure your business name is properly displayed on the COI, and that the coverage shown matches what is provided by your policy. Also, verify that the expiration and effective dates listed on the certificate will cover the length of your business partnership.
Here's a quick checklist to ensure you're getting the right COI:
- Business name: Does the name of your company match what's listed on the document?
- Coverage: Does the coverage shown on the COI match what's provided by your policy?
- Expiration dates: Will the expiration dates listed on the COI cover the length of your business partnership?
- Verification: Be prepared for clients to contact the insurer of the COI to verify it's a real entity.
COI Requirements and Benefits
A COI (Certificate of Insurance) is required in business situations where there's a potential for liability or loss. Many companies and individuals ask for proof of liability insurance before signing a contract, to ensure they won't be financially responsible if something goes wrong.
You'll want to have your COI on file, ready to prove you're prepared for the next business opportunity. This is especially important for contractors, as almost all businesses that utilize them will require a liability insurance certificate.
A COI provides proof that you have business liability insurance, protecting your business against claims of bodily injury, property damage, or negligence. It's a good indicator that you take your business seriously and helps establish you as a professional.
Here are some common requirements and benefits of a COI:
- The certificate holder's name, policy number and company name.
- The insurance company's name and contact information.
- The type of insurance you have, such as general liability or workers' compensation.
- Insurance coverage start date and policy expiration date.
- The amount of coverage you have, your deductible and policy coverage limits.
- Additional named insureds and additional insureds.
- Special conditions and description of operations language (if required).
There is no cost for a certificate of liability insurance as it's not a contract of insurance, merely proof of insurance coverage.
What's Included?
A COI typically includes information about your insurance policy and coverage at a glance. This includes the certificate holder's name, policy number, and company name.
The insurance company's name and contact information are also included in a COI. This is typically provided by the insurance carrier.
A COI will also show the type of insurance you have, such as general liability or workers' compensation. This is usually indicated on the document.
The policy start date and expiration date are also included in a COI. This is important to ensure that the coverage is in effect for the duration of the project or partnership.
The amount of coverage you have, your deductible, and policy coverage limits are also included in a COI. This information helps to ensure that you have sufficient coverage to meet the needs of the client or project.
Here is a list of what's typically included in a COI:
- Certificate holder's name, policy number, and company name
- Insurance company's name and contact information
- Type of insurance (e.g. general liability or workers' compensation)
- Policy start date and expiration date
- Amount of coverage, deductible, and policy coverage limits
Additional named insureds and additional insureds may also be listed on a COI. This can include clients or partners who are added to the policy for protection.
Special conditions and description of operations language may also be included on a COI. This can vary depending on the specific policy and requirements of the client or project.
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Cost
The cost of a certificate of liability insurance can vary widely, depending on what your company does, how many employees you have, and whether you've filed claims in the past.
You'll need to purchase a policy to have access to a COI, and getting quotes from several different insurance companies can help you find the best coverage at the best price.
The cost of business insurance can be affected by various factors, including the type of business you have and your company's history of claims.
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COI Appearance and Format
A certificate of liability coverage, or COI, is a physical document that proves your business has liability insurance. It's similar to an automobile insurance card and serves as evidence that your company is protected in case of accidents or damages.
A COI typically includes the legal name and address of your business, as well as the name of your insurance carrier and policy information, such as policy type, coverage start and expiration dates, and policy limits.
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The document also has a description box to denote extra details, such as the name of the company or individual that requires the proof of liability coverage. This might be the landlord of the building your business is located in or a contractor who's going to renovate your home office.
A COI from a vendor or subcontractor should be checked over to ensure it includes the correct business name, a policy expiration date that doesn't come before the completion date of your project, and general liability insurance at the very least, as well as workers' compensation insurance.
Here's a breakdown of what you should look for in a COI:
- The business name on the form matches the vendor
- The policy expiration date does not come before the completion date of your project
- It includes general liability insurance at the very least, as well as workers' compensation insurance
- The coverage limits meet or exceed the limits on your own insurance
Frequently Asked Questions
What if I don't have a certificate of insurance?
If you don't have a certificate of insurance, you and your business may be liable for damages and losses, putting you at risk of costly lawsuits. Get a COI to protect yourself and your business from potential financial losses.
Is a coi free?
A Certificate of Insurance (COI) is a complimentary service, meaning it's free to obtain. If you're being charged for one, it's likely time to review your insurance provider.
What is a certificate holder liability insurance?
A certificate holder is a third party named on a Certificate of Insurance (COI) with no protection or coverage under the policy, unable to file claims. They are often required for contractual or compliance purposes, but do not receive direct insurance benefits.
Sources
- https://tivly.com/certificate-of-liability-insurance
- https://www.techinsurance.com/small-business-insurance/certificate-of-insurance
- https://www.thimble.com/small-business-insurance/what-is-a-coi
- https://www.nerdwallet.com/article/small-business/certificate-of-liability-insurance
- https://www.nextinsurance.com/certificate-of-insurance/
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