So you've got a new contract on the table – congratulations! A client contract means you're just a signature away from a new source of revenue that can help your business grow and take you one step closer to where you want to be.
But a new contract can also mean a lot of confusing legal jargon and client requirements that you may or may not understand. We've spoken to lots of business owners trying to sort out exactly what their client contracts are asking for, and one question we hear over and over is this: What is a Certificate of Liability Insurance?
Read on to find out.
Do You Need a Certificate of Liability Insurance?
The good news is that a Certificate of Liability Insurance is pretty much what it sounds like: a piece of paper (or a digital file) that certifies that your business has a certain kind of liability insurance.
Clients typically ask to see a Certificate of Liability Insurance to verify…
- That your coverage levels meet their requirements.
- That your insurance policy won't expire before the end of the project.
- That you've named them as an Additional Insured, if they request that status.
How Is a Certificate of Liability Insurance Different from an Insurance Policy?
Certificates of Insurance are handy because they provide all the important details about your insurance coverage on one page. While a client could find all your coverage information by paging through your full insurance policy, that process would take much longer. The Certificate is a useful shorthand document that saves everyone time.
It's important to note, though, that a Certificate of Liability Insurance alone does not translate to insurance benefits. In order to actually collect benefits from your insurance provider, you must have your full insurance policy.
How Can You Get a Certificate of Liability Insurance?
This part is pretty easy. Once you've purchased an insurance policy, you can easily request a certificate proving your insured status from your agent. Because these certificates are often available as digital files, it's usually possible to have one sent to you through email – in other words, you can receive proof of insurance pretty quickly if need be.
To get an idea of what a Certificate of Liability Insurance looks like, check out this sample certificate (PDF).