Table of Contents
- What is a Certificate of Insurance?
- When Should You Request a COI from a Third-party?
- What Should You Look for on a Certificate of Insurance?
- Action Steps
When you’re a small business owner entrusting tasks to third-party companies, it’s essential to prioritize protection. Always ask for a certificate of insurance to ensure your business is covered in case of any unforeseen incidents.
What is a Certificate of Insurance?
A certificate of insurance (COI) is a document that verifies a company has insurance. It outlines the key information in the insurance policy including but not limited to the following:
- Named Insured
- Policy Number
- Effective Dates
- Key Coverage
- Limits of Insurance
A COI serves as your assurance that the contractor possesses the appropriate insurance coverage. It’s a proactive measure to safeguard your business interests in case of accidents or errors on their part.
“Can your company afford to be liable for someone else’s negligence? Prioritizing protection through a Certificate of Insurance is non-negotiable for small business owners outsourcing tasks. It’s the shield that ensures your business remains resilient against unforeseen risks, safeguarding your investments and operations,” says Unica’s Risk Control Consultant, Jason Ostapeic.
When Should You Request a COI from a Third-party?
You should request a COI anytime you hire a third party to do work for you; this includes any work on your premises, work done by subcontractors, or any other vendor. And if you do request a COI, store it for a minimum of 5-7 years and always request an updated COI each time it expires.
What Should You Look for on a Certificate of Insurance?
- Confirm the contractor’s liability limits.
- Check that the coverage doesn’t expire during the term of work.
Action Steps
In conclusion, as a small business owner, safeguarding your interests is paramount when delegating tasks to third-party companies. Requesting a COI ensures your business is adequately protected against unforeseen incidents. Remember to diligently store and update COIs, confirming liability limits and coverage expiration to maintain comprehensive protection for your business. Also, talk to your broker about how Unica can further protect your business.
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