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June 7, 2023

7 Best Practices for Certificates of Insurance

As a contractor, you have a duty to prove to your clients that you are properly insured before they can hire you to begin a project. Not only does this guarantee that you are covered against financial losses should anything go awry, but it also tells your clients they don’t have to worry about shouldering hefty costs if an unfortunate incident occurs.

This protection comes in the form of a Certificate of Insurance (COI). It’s a document issued by your insurance provider that verifies your existing insurance coverage in compliance with the specific conditions asked by your client or mandated by law.

So, once you do have a client who’s ready to work with you, it’s best to stay on top of your COI requirements to ensure the process goes smoothly.

Here are some certificates of insurance best practices to help you secure that contract quickly:

1. Understand the Requirements

It’s crucial to understand the specific insurance requirements of your clients or vendors. This is to help you ensure that your policies meet their requirements, which helps you avoid any delays or misunderstandings. Additionally, make sure the COI provided to you is written in a standard format and contains information such as:

  • The policyholder’s name;
  • The type of policy or coverage you have;
  • The effectivity and expiration dates of each policy you have;
  • The coverage limits; and
  • The exclusions.

2. Obtain Specific Guidelines

Your initial policy can only provide coverage for a limited number of risks, so make sure you determine the specific coverages necessary before asking for a COI. Having guidelines to follow ensures you can manage the specific liabilities you’ll be facing with the proper insurance coverage.

This is why it’s also important to partner with an insurance broker who understands the complexities of your industry and can recommend to you the exact policies you need with no unnecessary riders.

3. Make Sure It’s Legal

You might already know this, but it’s illegal for a policyholder to issue their own COI. A legal COI will only be recognized if it comes from a licensed insurance broker. So, to avoid any issues down the line, make sure to ask for a certificate of insurance directly from a professional broker.

4. Speak Up If You Have Concerns

As a contractor or a business owner, the financial security and overall well-being of your business fall under your protection and responsibility. So, if you sense that your COI is missing some details or fails to meet the standards set by the client, make sure you say something about it.

Don’t be afraid to be wrong. Familiarizing yourself with your policies from start to finish will pay off nicely in the end. Make sure to ask your insurance broker if they can explain your coverage limits, its exclusions, and what triggers a claim so you’re not left in the dark in case an unfortunate incident occurs.

A client and an insurance broker reviewing a certificate of insurance

5. Keep Expiration Dates in Mind

This is one of the best ways you can stay on top of your requirements for certificates of insurance. Set up a system to track the expiration dates of your COIs and ensure they are renewed on time—whether it’s a simple reminder you set on a calendar or creating a spreadsheet. By doing this, you can seamlessly follow up on any insurance renewals you may need without going past the due date.

In line with that, create a system for managing your COIs. Yes, it’s a tedious task, but your future self will thank you for your organizational skills. Having an internal system that manages or oversees the details of your COI can greatly reduce the risk of improper coverage or miscommunication with your clients and insurance provider in the future.

6. Slow and Steady Wins the Race

Some contractors tend to start working on a task without reviewing their certificates of insurance or having it properly approved. No matter how eager and well-prepared you are to start a new project with a client, don’t risk working without an insurance policy in place.

Thoroughly reviewing your policies and certificates will help you understand any additional information you may have missed the first time.

For example, if the contract you’re bidding on requires you to add another client or vendor as an additional insured to your policy, then you’re going to need your certificates of insurance to reflect that.

7. Don’t Throw Away Your Expired Certificates of Insurance

Having all of your certificates of insurance in one file could come in handy even after the conclusion of your project or the policy period it describes.

For instance, a client could end up complaining that you didn’t do a good job of fixing the wiring in the building a year after a project has been completed. He could file a claim against you and your company and allege that they received substandard service.

Assuming you have a general liability policy in place at the time the faulty wiring was discovered, it can still provide coverage against financial losses—even after the policy period.

Here is where your certificates of insurance come into play: the valuable information you have there, especially the details about your policies, could help you cover some of the damage costs.

A pair do reading glasses on top of an insurance policy document and insurance claim forms

Work on Your Next Project Without Worries With Contractors Insurance

Securing your certificates of insurance has never been easier, thanks to Contractors Insurance.

We specialize in providing customizable insurance plans for contractors and other professionals in Ontario. Our dedicated team is here to explain each policy thoroughly and with full transparency. With our years of experience in successfully handling the insurance needs of our many clients, you can count on us to provide only the best coverage—guaranteed to have no unnecessary riders.

For more information about our personalized insurance packages or to get a quote, contact us today!


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