Understanding the term Certificate of Insurance(COI)
After you purchase an insurance policy Your broker or insurance company gives you a document called the Certificate of Insurance. Mainly in the case of Business Insurance or Commercial insurance, it is given for you to use as proof that yes you do have an insurance policy. In this way, it gives more credibility to your business. Also, your clients feel more at ease while doing business with you. COI also summarizes all the key points of coverage and conditions included in your Insurance policy. For example, a typical COI tells you about the following things:
- Who is the policy owner
- Since when was the policy effective
- What type of Coverages were purchased
- what are your policy limits, etc.
So you must have a COI if you want to work unhindered as no hirer would be willing to foot the losses in case something goes wary.
Who Needs to have a COI?
The response to this question is contingent on what role your business plays in a joint venture. Say, if you’re a construction company, for example, and you’re hiring a subcontractor to work on a project. Here it’s necessary for you to ask for proof of insurance from them. On the other hand, If you are working as a subcontractor or other form of a business partner, the organization that is hiring you and demanding your assistance would need evidence of insurance from you.
Requesting an insurance certificate has nothing at all to do with your trust in the other party. It’s just about minimizing damage and ensuring that you’re safe in the event that something goes wrong. So, even if you trust the organization with whom you’re collaborating and have previously collaborated with them, you should always request a COI. Whenever you sign a new contract or agreement with them always ask for proof. This protects you from unwanted and unnecessary risks caused during the collaboration period.
What is the cost of getting a COI?
Obtaining a certificate of insurance is totally free. It is a voluntary service provided by the firm you got your business insurance from. But in case your broker is charging you a premium for offering a COI, It might be a wise idea to switch brokers.
How to get a Certificate of Insurance?
If you want to get a COI for your Insurance policy you can go with these simple and easy steps:
- Firstly, contact your broker and inform them that you need evidence of insurance(COI). You should also explain the minimum coverage amount and policy limits. If your policy already meets the criteria, the broker may contact the insurer to obtain a Certificate of Insurance. and if you need to buy a rider to expand coverage for the project, your broker will provide you with the necessary information and paperwork.
- When things are ready, your broker will generate the COI and give you a printed certificate of insurance, which you must then send to your client to complete the deal and sign the contract to begin working together.
Although the procedure is straightforward, it should be noted that receiving the COI from your broker can take several days or even weeks, depending on the availability of your broker and how efficiently they are able to complete all required paperwork and provide you with your COI.
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