Why Clients Want To See Your Certificate of Insurance

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It’s not that they don’t trust you, they just need to verify a few things

As a small business owner, it’s probably happened to you: You’re quoting a job or beginning work on a project and your client asks you for your certificate of insurance. Although you have a business policy, it never occurred to you that you needed a certificate or even what one is. Before you panic, take a deep breath and realize that what they’re really asking for is proof that you’re insured. Like many insurance products and solutions, certificates of insurance can be confusing and knowing what you have and what you need is not always simple. To help you, we’ve put together this short outline of what a certificate of insurance is and when you will need one.

What is a certificate of insurance?

A certificate of insurance is a document that outlines the details of your business policy coverage. It is basically a shortened version of your policy that offers key information at a glance, like the type of coverage you have and the policy limits. Details like your provider and carrier names, the amount of coverage and the effective dates of your policy are usually listed.

When do you need one?

For many business owners, a certificate of insurance is not necessary and even though they have coverage, they don’t have occasion for showing their certificate. Depending on the business you’re in, you may want to consider getting a certificate, especially if you’ve had a request from a client to see it.
 
If you’re in the construction, plumbing, roofing or any kind of service or repair business, for example, a client may request to see your certificate of insurance before giving you the contract for a project. This is not uncommon and doesn’t mean they don’t trust you—it’s just their way of protecting themselves in the event that something unforeseen happens. Showing your certificate of insurance allows them to verify:
 
  • • The validity of your coverage
  • • That your policy will not expire before you have completed their project
  • • That you have included them as an additional insured
The certificate is a snapshot of your coverage and is much faster and more efficient than asking you to see your policy and having to read through it.

How to get one

Many times a certificate of insurance will be included in your policy paperwork, but if it isn’t, your insurance provider can either email a PDF file or mail a print copy to you. If you do receive it as a digital file, you have the added convenience of keeping a copy on your phone or laptop and can simply open the file during contractual agreements to show your client.
Although some clients may not ask you for your certificate of insurance, having it handy is a surefire way to ensure that your projects don’t get delayed or that you don’t risk losing a project because you can’t produce one. Remember, the certificate is just a shortened version of your coverage and offers the key aspects of your policy at a glance. It doesn’t replace your policy and can’t be used to collect benefits, so always keep your full paperwork in a safe place in the event that you need to make a claim. For answers to more business insurance questions, please give us a call today.