As a contractor, you have probably been asked by a potential client to present them with a certificate of liability insurance. Clients request the certificate of liability insurance to ensure that you’re covered in the event of an accident or injury while you are working on a specific job. The certificate is a standard document written on an ACORD form that includes the details of your policy as well as any endorsements or exclusions to the policy.
Is it complicated to get the certificate?
No, it’s relatively easy. If you already have a valid insurance policy, you can contact your insurance agent and request a new certificate of liability insurance. You’ll need to request a new certificate for each new client or job because your clients, whether general contractors, property managers or homers, need to be listed as “certificate holders” on the certificate.
Your agent will fill out a new ACORD certificate of liability form, which details your policy, limits, policy dates and types of policy endorsements included in the policy. The client may also request that you add additional insurance, such as umbrella or excess liability insurance or add him as additional insured as an endorsement to your insurance policy.
How much does it cost?
Certificates of insurance should not cost you anything. If you have a policy in place, your insurance agent should be able to provide a COI without an extra charge. In fact, most states do not allow for agencies to charge a fee for COIs.
How long does it take?
While COIs are affordable, they can take several days to obtain. At times your insurance policy may not match your clients requirements and you may need to add endorsements to the policy. Be sure to send all the new contract requirements to your agent so they can assess the requirements.
If the policy fits the requirements, it should take less than a day, however if the policies do not match then this process can take up to 3-4 days until you receive the new certificate. At times this can take longer if there is a lot of back and forth between you, your insurance agent and the client.
The longer it takes, the more you are delayed in starting your project. You may even lose out on the job if you can’t provide the certificate of insurance fast enough.
It’s all in the details
What happens if you give the wrong expected end date of your project? Or, you forget to inform your agent to add additional insured to your certificate? Your insurance agent will need to fill out a new ACORD certificate of liability form each time you change a detail. And you can get charged for each of these changes.
Therefore, you need to make sure that you have all the details. If there’s a particular point missing on your certificate, or if one of the coverage limits in your policy is inadequate, you will be charged extra for any changes to the policy that need to be made.