What is a Certificate of Liability Insurance?
August 28, 2017
A certificate of liability insurance (COI), also known as an ACORD certificate of liability insurance, is a simple document issued by your insurance company that verifies that you have insurance coverage for your small business. The details it shares include the types of coverage, like professional and/or general liability insurance, the issuing insurance company, your policy number, the named insured, and the policy’s effective dates, and the types and dollar amount of limits and deductibles.
Why do I need a certificate of liability insurance?
A certificate of insurance is requested when liability and large losses are a concern. For example, if you’re providing software programming services for a client, they may require a certificate of insurance to prove that certain liabilities will be covered during the course of the project. No matter what kind of client you’re working with, having the right insurance policy and proof of insurance will protect you and your client and give you both peace of mind.
Sometimes it is often required in order to win contracts. Many companies and individuals that hire contractors need to know that they won’t be held liable for damages, injuries, or substandard work, and therefore require that you have insurance.
Even if you haven’t been asked to show a certificate of insurance, it’s an added benefit of having proof of your small business coverage. Most insurance providers include the certificate in your initial insurance documents; if not, they are required to provide one upon your request.
How is a certificate of liability insurance issued?
The certificate of insurance is issued along with your policy and should be one of the documents your receive when you purchase insurance for your business. Additionally, you can easily request a certificate of liability insurance by visiting the Policyholders page on Hiscox.com and clicking “Get a Certificate of Insurance.” Enter your policy number (enter only the middle numbers. For example, UDC-1234567-CGL-18) and email address, and an email will be sent to your inbox typically within the same day with your COI.
Why is my client asking to be added to my certificate of liability insurance?
Don’t be alarmed if the client also requests that they be added to your certificate as a certificate holder. This is a common request, and complying does not give them any legal rights under a certificate, because the certificate simply establishes that an insurance policy exists.
How quickly can I get a certificate of liability insurance?
If you need a certificate of insurance to fulfill a contract requirement or would just like to have a copy on file, contact your insurer. When you purchase small business insurance from Hiscox a certificate of insurance is included in the docs you receive upon purchasing your policy.
This is known as commercial insurance and protects you in the event you are sued for claims that come within the coverage of your liability insurance policy. There are three types of liability insurances and the type of insurance you choose depends on the details of your business.
- General liability insurance also known as commercial general liability (CGL) protects your business from another person or business’s claims of bodily injury, associated medical costs and damage to property.
- Professional liability insurance sometimes called errors and omissions insurance (E&O insurance) is coverage for another person’s claims against businesses that provide professional and personal services.
- Business owners policy (BOP) is a combination of general liability and business property insurance.
Related Reading: Why do marketing and media consultants need small business insurance
This article was updated on July 18th, 2019 to include specific details on how COI are issued to customers from Hiscox and refer to up to date details on our certificates of liability.