Why Your Business Needs to Show the Certificate of Insurance
Dan Levenson March 08, 2021
Small business owners are quickly learning that they need proper documentation to guarantee the success of their business. One document that most business owners tend to overlook is the certificate of insurance (COI).
Understand that the COI is a vital document for all organizations that use outside contractors and vendors. However, most business owners are still unclear about why they need to show their certificate of insurance. In this article, we will take a comprehensive look at COIs, and why you might be asked to show them.
What is a COI?
A Certificate of Insurance is a document that proves your business has an operational insurance policy. It includes; the expiration date of the coverage, the limits of the insurance, and the type of insurance. You get the COI from an insurance company, thus verifying that your business is covered.
Reasons Why A Client May Ask for a COI
Regardless of the type of industry, there are several reasons why you might need to show your certificate of insurance. Below is a quick look at some of these reasons.
1. Customer Looking to Protect their Financial Interest
Most customers will need to make sure you have the proper insurance coverage. In doing this, these customers can rest assured that they are not liable in the event of a claim. Understand that we are living in times when everyone is looking to protect their financial interest. Customers are merely looking to avoid the headaches that come with insurance claims.
2. Bidding on a State or Municipality Job
If you need to bid on a job at any state or municipality agency, you have to show your certificate of insurance. Municipality or state agencies will only give tasks to compliant companies. The first step to ensuring that your company is compliant with state and federal law is by having the proper insurance policies in place. It is impossible to bid on any municipality or state job without a certificate of insurance.
3. Signing a Contract
All businesses will need to sign a contract at some point in time. However, did you know that your business cannot sign a binding agreement without the COI? According to the law, only compliant establishments can sign a legally binding contract. Having a certificate of insurance will ensure that any signed contract within your organization is legally binding.
4. Obtaining Professional Certification or License
You will need to show your certificate of insurance when obtaining any professional license or certification. Understand that these documentations demonstrate a business’s commitment towards continuous learning, upholding industry standards, and superior professionalism.
How to Get Your COI
Your insurance provider will always give you a certificate of insurance. If you recently purchased insurance, you probably have the certificate. However, if you didn’t get the COI, contact your insurance provider.
You can see that the COI is a vital document for any business establishment. The good news is that your insurance provider will always provide it for free. Ensure that your business is compliant by having all the right insurance policies in your establishment.
Finally, understand that you should always have your Certificate of Insurance with you; do not wait until a client asks for it. It could be the difference between losing and keeping a client.
Do you need help securing the proper insurance coverage for your business? At InsureYourCompany.com, we will help you employ all the right strategies to avoid loss of business or legal issues. Ensure you contact us today to speak to a licensed professional with years of experience in the insurance industry. It is time you started focusing on the growth of your enterprise.