As a small business owner, there is a lot you need to have on hand to make your business successful. One often overlooked document — but also one of the most important — is a certificate of insurance (COI).
You may be asked to share a certificate of liability insurance for a variety of reasons, including:
- A client might ask for one before working with you.
- You might need a COI to get a professional license.
- A commercial landlord might ask for proof of insurance before signing a lease agreement.
If you’re looking for more details on why a certificate of insurance is required, you’re not alone. In this article, we’ll take a closer look at:
- What is a certificate of insurance?
- Why you need a COI
- How to respond to requests for a certificate of insurance
- How Next Insurance’s digital certificate insurance can help your business
What is a certificate of insurance?
A COI is a document that proves you carry business insurance coverage, such as general liability insurance and workers’ compensation. It shows potential clients that you have sufficient liability limits to protect your work.
Knowing how to get a COI is essential to operating your business. The ability to quickly and securely provide a client with proof of liability insurance may be the difference between getting a job or moving on to the next prospect.
Old school vs. new school COIs
Historically, if you needed a certification of insurance, you would have to request one from your insurance company or agent, which could be time-consuming. The request could get overlooked or the document may arrive too late for your company to beat out the competition on a project or client request.
Next Insurance uses technology that allows you to take the process of getting a certificate of insurance into your own hands. Simply use our online Live Certificate feature, and you can access an unlimited number of COIs instantly. If you have active insurance coverage with us, you’ll have 24/7 access from a computer or mobile device.
Reasons why you might be asked for a COI
Regardless of your industry, there are many reasons you might be asked for a certificate of insurance:
- Customer want to protect their financial interest
- Bidding on a job for a municipality or state agency
- Signing a contract
- Obtaining a professional license or certification
- Proving specific liability limits or lines of coverage
Why different industries need a COI
Construction: A general contractor could be asked for a COI before starting work on a home remodeling project. The contractor might also want proof of insurance from a plumbing subcontractor to ensure the plumber's coverage limits would pay for any damage during the project.
Real Estate: The developer of a residential real estate complex might want a certificate of insurance from a real estate agent to make sure they have enough professional liability insurance to cover any financial fallout if there is a contractual mistake with a potential buyer or tenant.
Retail: A commercial landlord or property owner might ask for a certificate of insurance before signing a lease to make sure you are protected from expenses related to any accidents that happen while you occupy the rented space.
Consultant: An auto parts store looking to automate inventory and sales tax reporting could request a professional liability COI from a computer consultant whose missteps could trigger financial penalties for underreporting income.
How to respond to requests for a certificate of insurance
If you have business insurance through a traditional carrier or agent, you'll likely have to make a request online or call someone to get a certificate of insurance. After they receive the request, it usually takes time to process it and create and deliver the document.
With Next Insurance, the process is streamlined and painless. With a fast and secure electronic process, you now have complete flexibility when and where you provide a COI to a prospect or existing customer. You can also add someone as an additional insured for free.
Our Live Certificate feature gives you access to a do-it-yourself, customer portal from which you can text, email or download copies of your COI. This helps you avoid any delays so you can get back to focusing on your business.
We don’t limit the number of COIs you can request and there are no additional charges.
How Next Insurance helps business owners find the right insurance
We’re 100% dedicated to helping small business owners and the self-employed find the business insurance they need without paying for coverage they don’t need or unnecessary fees.
We provide customized insurance packages for more than 1,000 different types of businesses. Coverage typically includes general liability insurance to protect against expenses related to the most common accidents a business might face.
Start a free instant quote today to explore options for your business. Our licensed, U.S.-based insurance advisors are standing by to help if you need any additional information.