As a small business owner, you may be asked by clients to provide “proof of insurance” in the form of a certificate of insurance, or COI. Specifically, you may be asked to prove that you have General Liability insurance, which protects your business in case a third party brings a claim of property damage or personal injury against you.
So what exactly does this request mean, and how do you go about obtaining a certificate of liability insurance? Let’s break it down.
A certificate of liability insurance is a one-page document that proves you have the insurance you say you do and provides details about your policy. It’s much shorter than your whole policy, providing only the essential information that your customers or contractors need to verify that you have appropriate coverage. Proof of insurance is often required before clients will formally agree to do business with you, as they don’t want to be held liable for damages, accidents, or mistakes you make when conducting work.
The certificate can be obtained through your broker or insurance company and is typically sent directly to the requestor. If you use CoverWallet for insurance, you can request a certificate online by logging in to the digital platform.
If you ever need to request a certificate of liability insurance from a third-party, you can also ask that it come directly from the other party’s insurer or broker, or send a request through your CoverWallet account to maintain a digital copy.
Typically, customers will request a certificate of insurance when they hire you as a contractor or enter a partnership. It assures them that if you damage property or cause an injury during work, your insurance will cover it.
Be prepared to provide proof of insurance while you’re in the process of selling to a new client. Many won’t even begin to do business with you or sign an agreement until the certificate is in their hands.
A certificate of General Liability insurance should include:
It’s important to be proactive and make sure your certificates - both the ones you provide and the ones you request - are up to date. Carefully check the effective dates, and ensure you request updated versions before coverage expires. Losing coverage even for a short period of time could be a costly mistake.
Regarding coverage types, many small business owners elect to purchase their General Liability coverage via a Business Owner’s Policy, or BOP. A BOP combines General Liability insurance with property insurance, so your certificate would list both.
Depending on your industry, you may also have Professional Liability insurance, also called E&O insurance, which protects you from liability arising from professional mistakes.