Certificates of Insurance and Corporate Compliance
March 22nd, 2018 by ExigisAdmin
Businesses often have different requirements than individuals when it comes to dealing with contractors. While everyone should make sure that their contractor carries appropriate insurance before ordering any work to be done, a business may request official verification in the form of a certificate of insurance. Certificate of insurance tracking companies can make this process easier and less time-consuming.
Why a Certificate of Insurance?
Most businesses won’t allow work to start until insurance has been verified, especially if the company is a government agency. Insurance may include liability insurance, workers compensation insurance, commercial vehicle insurance, or umbrella insurance. The certificate lists information about the policy, including the limits of the policy and the expiration date. If the policy expires before the contract ends, a new certificate of insurance must be issued.
What Does a Certificate of Insurance Represent?
Corporate compliance requires both sides to be vigilant about insurance coverage. The business that’s hiring the contractor should request a certificate of insurance. Otherwise, the company is put at risk. However, it is important to note that the certificate is simply a piece of paper fulfilling the documentation requirement. It’s not an insurance policy. Furthermore, once issued, the contractor can present the certificate as proof of insurance, when in reality their policy has lapsed, or has different coverages. Be sure to ask for proof of coverages, especially in light of commercial property policy limits needing to be higher than residential property requirements. Don’t hire anyone who cannot provide the detailed coverage information you request or you may be liable in a court of law.
Important Coverages to Keep in Mind When Hiring A Contractor
- They must be adequately insured for work they are doing.
- They must have a commercial general liability insurance policy.
- They must have the insurance policies in place that you require of them.
- They must provide proof of required coverages in the form of a certificate of insurance.
Protect your business, employees, and bottom line by following these guidelines when you hire a contractor. Be sure the certificate of insurance in your file accurately represents the coverages necessary in the event of a job gone wrong.