Certificate of Liability Insurance
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Certificate of Liability Insurance

When a cop pulls you over, he or she will ask to see your insurance information – that’s more or less what a Certificate of Liability Insurance is. It’s proof of insurance for IT contractors.

Of course, there’s no cop who pulls you over asking to see your small business insurance. What happens instead is that your clients will want to see proof of insurance before they agree work with you. When you sign a contract, a client will ask to see your insurance documentation. Sometimes clients may even want you to attach a copy of your Insurance Cert to the contract.

It’s just part of the rules of the road, so to speak.

How Do You Get a Certificate of Liability Insurance?

Businesses don’t “buy” an Insurance Certificate. They get an Insurance Certificate only after they have insurance. That makes sense: you have to have insurance to have proof of insurance.

When you get insurance through TechInsurance, we can supply you with an Insurance Certificate for any of the following coverages…

Take a look at this Sample Insurance Certificate to see what an Insurance Cert typically looks like for an IT business.

What’s on a Certificate of Insurance?

We’ve said that a Certificate of Liability Insurance is your “proof of insurance.” But what does that mean? An Insurance Cert is a one-page document that shows you have active coverage. Your cert provides a quick summary of the important details of your coverage, such as…

  • Expiration date.
  • Policy limits.
  • Additional insureds (if you have contractors covered under your policy).
  • Deductible.
  • Key coverages.
  • Policy riders.
  • Contact information for your insurance provider.

Why Do Clients Want to See Your Certificate of Liability Insurance?

Clients often require you to have coverage, but this prompts the question: why do clients want to see your insurance certificate in the first place? Three reasons…

A client wants to know you have liability insurance. Clients are worried that something might go wrong with your IT project. Knowing that you have liability insurance reassures them.

A client’s insurance may require it. Your client’s insurance carrier may require them to document that all their vendors and contractors have coverage.

Clients want a summary of your insurance information. Insurance policies are complicated. Sometimes clients just want the Cliff notes. Insurance Certs provide a one-page summary for them.

Of course, clients aren’t the only ones who may ask to see your insurance. Other third parties like vendors, business partners, and landlords may need to see your insurance documentation, too. But once you have insurance it should be a fairly easy process to get an Insurance Certificate and send it their way.

How to Add Subcontractors to Your Insurance Certificate as Additional Insureds

Our research shows that 24 percent of small IT businesses hire subcontractors. As an IT project manager, you may have to do the same. But when you do, you’ll want to make sure that you have coverage for subcontractor liability. To do that, you have two options:

  1. Make sure subcontractors have their own insurance. When you hire subcontractors, your contractor agreement can specify that they’ll need their own coverage. Ask to see their insurance certificate before hiring.
  2. Add subcontractors as additional insureds to your policy. Sometimes the simplest option is to add an additional insured to your own Professional Liability or General Liability Insurance. Contact your agent and they’ll take care of the process.

If you add a subcontractor to your policy, you’ll have to request a new insurance policy from your insurance provider. You provider should respond quickly – after all, the practice is fairly standard.

What Disclaimers Come with an Insurance Certificate?

When you get an Insurance Certificate, you may notice that it has a disclaimer saying that the document is for informational purposes and can’t be used in place of an insurance policy.

What your insurance company is saying is that this document is only a summary. Having the cert does not mean you have coverage. You have to have the full policy for that. Plus, your full-length policy has many more warranties and conditions that can’t be summarized in a one-page certificate. To know if a claim is covered, you should always go back to your insurance agreement.

The Small Business Insurance Leader