A certificate of workers' compensation insurance is a document that provides proof of coverage and summarizes important details about your policy in a single page.
Workers’ compensation insurance is required in most states for businesses with one or more employees. Depending on the laws in your state, it may also be required for sole proprietors in riskier professions, such as certain types of construction contractors.
Workers' comp covers the medical costs and lost wages for work-related injuries and illnesses. Your regular health insurance is unlikely to cover injuries arising from a work-related mishap.
Most workers’ comp policies also cover your legal costs if you're faced with an employee lawsuit over a workplace injury or illness.
Of course, if you need a workers’ comp insurance certificate, you’ll first have to buy a policy.
Workers’ compensation insurance is required in nearly every state for businesses with employees. A certificate of workers’ comp insurance is the document you may share as your proof of workers' comp coverage.
Proof of insurance is often needed when you:
A Certificate of Insurance (COI) reassures your clients that if one of your employees suffers a work-related injury or illness, you’ll be able to cover the costs of medical bills, lost wages, and employee lawsuits. It also shows that the certificate holder is in compliance with state workers’ comp laws.
Workers’ compensation regulations vary from state to state, but any business with employees will likely need workers’ compensation coverage. In some states, any subcontractors you hire will also be considered employees.
Many states require sole proprietors to have workers’ comp coverage in riskier professions, such as the building trades. For example, California requires sole proprietors to have workers’ comp if they work in asbestos abatement, concrete, roofing, tree service, or HVAC contracting, even if they don’t have any employees.
Even when not required by law, sole proprietors and independent contractors may also need to purchase a workers’ compensation policy and produce a workers’ comp certificate to fulfill the terms of a contract.
Depending on where they are located, self-employed business owners may be eligible for a workers' comp ghost policy. While this policy offers no real coverage, it can help satisfy legal or contractual requirements for a business for a low fee.
Many sole proprietors also buy workers’ comp regardless of requirements because it can cover their medical bills for a work-related illness or injury, whereas regular health insurance will not. Additionally, workers’ comp can help offset some of their lost wages if a workplace injury leaves them unable to work for a while.
One of the biggest risks of going without workers’ comp insurance is leaving yourself at risk of an employee lawsuit and unpaid medical bills in case of a mishap.
You might also face fines and a license suspension or revocation, depending on the laws in your state.
Here are a few examples of state penalties for failing to comply with workers’ comp laws:
A workers’ compensation certificate typically includes the following information about your workers’ compensation insurance policy:
One thing you won’t find on your certificate of insurance is the names of other companies listed as an additional insured. A workers’ comp policy is written to cover your employees, not other companies.
You can, however, add a waiver of subrogation to your workers’ comp, if any of your customers require one. This waiver gives an exemption to a customer that would prohibit your insurance provider from pursuing a claim against the customer over one of your employee’s injuries.
To see what a workers comp COI looks like, check out this sample ACORD certificate of liability insurance [PDF].
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The certificate means peace of mind. And you can access it on the Insureon online customer portal where you can review policy info and all of your insurance documentation.
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