Certificate of Insurance – What You Need To Know
The New Year brings with it new business relationships.
If you’re a subcontractor on a larger project, you may be asked to enter into a contract that requires insurance coverage for any damages that may be sustained while working on that project. This usually means you’ll be asked for something called a certificate of insurance. So what is it, how is it used, and when is it necessary?
A certificate of insurance is not an insurance policy; it simply describes your policy to the other party, including particulars like effective date of coverage, types of insurance coverage, and the dollar amount of any liability.
Often the “certificate holder” (the party requesting the certificate) will ask to be added to your policy. This way if any damage or suit is incurred, both you and the certificate holder will be covered by your insurance. This is called “making an endorsement to the policy” (not “endorsing the certificate of insurance,” as it’s often mistakenly put). (more…)