In the course of securing new business, many small and startup tech firms find that potential clients often ask to see a certificate of liability insurance (also commonly called a Certificate of Insurance). At TechInsurance, we've gotten more than a few questions about what the Certificate of Insurance is, how it functions, and when you might need one. Here are the answers.
Q: What is a certificate of liability insurance?
A: A certificate of liability insurance is a single sheet of paper that summarizes the benefits of an insured party's insurance policy. In short, it is proof of your insurance coverage and limit of your policy. Part of its value is that it contains extensive details about an insurance policy on a single sheet of paper. Typically, the certificate includes the insured party's name, the insurance company's name, policy numbers and types, insurance limits, effective dates, expiration dates, coverage specifics, and insurance limits.
Certificates of insurance also generally include language that indicates that, if an insurance policy is cancelled, any and all certificate holders will be notified.
Q: Who counts as a "certificate holder?"
A: Anyone who is named in and insured by the insurance policy counts. In some cases, clients may ask to be named as a certificate holder to ensure that they'll be notified in the event that your policy is canceled before its expiration date.
Q: Who counts as an "additionally insured?"
A: This refers to anyone else besides the policyholder who is covered by an insurance policy. A certificate of insurance typically includes a list of additionally insured parties, if they exist. For the purposes of most tech firms, additionally insured parties would include your customers or clients. People who enjoy "additionally insured" status on your policy can receive coverage benefits if the work you do on their behalf leads to an injury or property claim against them.
Q: Why would I need a certificate of liability insurance?
A: If a client asks for proof of insurance before agreeing to sign a contract with your company, you would need to show your certificate of liability insurance. Because it contains all of the important details of the insurance policy on one sheet of paper, it is much easier to share with clients than an entire policy.
Q: Is there anything an insurance certificate can't do?
A: Yes. While the certificate of liability insurance acts as proof of insurance, it does not actually grant any of the insurance benefits in and of itself. To ensure that you have access to your benefits, be sure to have a copy of your full insurance policy on file.
Q: How quickly can I get a certificate of insurance?
When you work with TechInsurance, you can often receive a certificate of insurance in less than an hour, thanks to our online application process. Traditional, brick-and-mortar insurance agents may take a few days to secure you a certificate of insurance.