The funny thing about insurance is that many people are hesitant to pay for it or acknowledge its value until something bad happens. Nevertheless, this solution has become a fixture in the lives of billions, and it’s hard to imagine leading a carefree life without one form of coverage or another. As for a certificate of insurance, this document is much more unfamiliar. With luck, this article will clear away any misconceptions about it and give you an understanding of how it works.
‘Certificate of Insurance’ defined
A certificate of insurance (COI) is a document that outlines your insurance policy and its coverage. Most insurance policies contain pages upon pages of rules and conditions interspersed with unique details about you and your plan. In contrast, the COI is concise and only contains the most important details.
For example, beyond the name of the insurer (and insured), dates, and signature, this document will probably also contain key provisions about the policy – what it covers, which companies or entities are eligible to provide services under the agreement, and what the limits of the coverage are.
Benefits of a COI
The primary benefit of a COI is that it provides proof of coverage that’s quick and easy to comprehend. For some insurance operations, you can get away with producing your full policy to the requesting entity, but countless other operations (especially pertaining to insurance of whole companies) will require the more compact COI. Without this proof, you may have a hard time getting goods and services from other businesses and contractors.
Another situation when a COI provides a significant advantage is in the hiring of contractors. Often, the choice to work with a contractor is only made after they can show a valid COI, so you know that they’re a safe choice and won’t cause too much trouble for you if something happens.
Tips for getting a COI
Whether you’re the one ordering a COI or the one checking it, there are a few things to keep in mind. First, you should make sure that the document was issued by a legitimate company with a solid reputation and plenty of good reviews. Naturally, you’ll also want to make sure that all the details are in order – the dates and names match those expected. To prevent any unwelcome surprises, be sure to check the coverage amount and stipulations for when coverage kicks in or doesn’t apply.
COI verification and tracking
Beyond checking the basic details outlined above when starting a project or taking on a worker/contractor, you’ll benefit from additional verification and tracking – especially for high-risk projects. It isn’t uncommon for these projects to involve dozens or hundreds of COIs from different vendors, so having someone responsible for tracking compliance can be helpful. They’ll look at things like certificate expiration, adherence to policies, and various statuses of the issuing company/broker so that all your bases are covered and you can carry on with operations.