What Is a Certificate Of Insurance?
Almost all Certificates of Insurance are written on an industry standard form known as the ACORD 25. ACORD, is the acronym for the Association for Cooperative Operations Research and Development. It is a non-profit organization that provides the insurance industry with standard forms that all insurance companies use. This used used by your clients as proof of insurance. At the end of this page is a way for you increase your business by up to 20 percent using one simple method with your Certificate of Insurance.
There are Four Main parts of a Certificate of Insurance:
It is important to realize that traditional property insurance policies do not cover losses when a property is being rented out for habitational use.This is because of the higher risk of losses in Apartment Buildings. You need to have a specialized policy that covers you for these risks. Apartment Building Insurance is critical to make sure assets are covered.Many of the risks in owning property are the same no matter what type of building you own.
There are losses to the structure and losses from people being injured on the property. While many of the risks are the same, the frequency that these losses occur are much greater than single family homes. It is also important to remember, that owning an apartment building is a business. Your unique needs must be addressed.
- The first part shows the name of the Insurance Agent who wrote the policy along with the agents contact information. It also shows the name of the insured. Finally, it lists the various insurance companies that the insured has policies with. It is very common for General Liability, Workers Compensation Insurance, Umbrella or Excess Liability Insurance and Commercial Auto Insurance to be written with different insurance companies.
- The second part of the Certificate of Insurance, lists the type of insurance. It contains the policy number along with the effective date of the policy along with the policies expiration date. Finally it lists the coverage limits of the policy. These limits usually vary greatly for the type of loss covered.
- The third part is a section where more detail about your business. It is a description of operations, locations where you may be working and any vehicles that are insured. In certain situations an additional insured (party you are doing work for) may ask for this section to be filled out. It will name the location where the work is going to be performed and occasionally the type of work to be done. The VIN Numbers of any vehicles insured may also be listed here. In addition sometimes various Government entities will require specific language to be written in this space before any permits or the like are issued.
- The fourth and final part is the Certificate Holder or named insured. This is the party that requested you get the Certificate of Insurance. This can be issued to you blank and can be used as proof of insurance coverage.
What Steps Do I Need To Take To Get A Certificate Of Insurance
If you have your insurance with FarmerBrown.com it is as simple as calling us up or sending us an email and we will have the Certificate of Insurance emailed, faxed or mailed to you, your client or your lender directly.
If there is specific language required it is always best to email it to us to ensure accuracy.
Why Do I Need To Provide A Certificate Of Insurance?
The main reason you are ask to provide a Certificate of Insurance is that it shows proof of insurance. There is no need to send a client a 100 page insurance policy.The two types of clients that will ask for this are property owners where you are doing work. This shows that you have insurance coverage in the event an accident happens while you are working. The other main use is if you are a subcontractor. The general contractor will require you to provide them a Certificate of Insurance. The general contractor is required by their insurance carrier to collect Certificates of Insurance. If they do not they will be charged more for their insurance when their policy is audited at the end of the term. It is important to remember this if you hire any subcontractors as you do not want to get a big bill at your policy audit for having uninsured subcontractors.
How Long Does A Certificate Of Liability Insurance Last?
The Certificate lists the policy terms on the form. Since the different types of insurance can have different terms the certificate may need to be updated if any of the policy terms has expired. It is always a best practice to always request a currently dated Certificate of Insurance.
Now that you know all there is about Certificates of Insurance I will let you in on a secret that we have learned from years in the business. Get a Certificate of Insurance and get it laminated. It will cost you less than $10. When you go to a prospective client you can show them that you have insurance when you are presenting your proposal. You can ask are the other companies they are getting quotes from insured. This will make you look much more professional than the average contractor. The result of this will most assuredly be additional work, even if your prices are higher. The same goes for any bond you may have.
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