When doing business in Southern California, there is a good chance you will be required at some point to provide a certificate of insurance (COI) for your company. Depending on your line of business, requests for a certificate of insurance may come from state regulators, municipal offices, contractors, vendors, partners, and even clients. Here are four things you should know about these documents.
Purpose of a COI
In essence, a COI presents proof of insurance. If you have San Diego general liability insurance, a copy of your policy or even a binder document issued by your insurance agency will informally prove your business is insured. However, when an official proof of insurance is required, a COI must be issued by an insurance company or obtained by your insurance agent.
What COI Documents Show
The information contained within a COI is concise and to the point: you will find the name of the insured parties and the addresses of brick-and-mortar establishments under coverage. A very brief description of the policy is included along with the limits for valid claims. Some insurance companies include the effective date, while others simply state that coverage is in effect. The more important expiration date is provided by all COI documents, and contact information of the insurer or issuing agency is always provided. If for any reason a third party you are doing business with requires more information, they would have to review the actual policy documents.
Value of a COI
Although COI documents are taken at face value, their most important feature is their validity. A COI is requested because it can be validated. When it is issued electronically, it usually includes a web address the document reviewer can click and be taken to a secure website where a code can be input to confirm validity. Paper COI documents may include a telephone number that connects to an interactive voice response system for validation. To truly understand the value of this feature, you must put yourself in the shoes of a requester who has to be covered as an additional insured and think about how insurance binders or policy documents could be faked.
Reasons to Request a COI
Whenever a business activity has a potential for liability situations or monetary loss, business partners may request to be included in a liability policy. In this case, a COI would be the best document to prove the policy has been properly amended. Even certain business operations that may seem to be routine could require proof of San Diego commercial insurance. One example would be moving your main office into a new building where the property manager may want to see a COI for the moving company. If you are a self-employed professional licensed by a California regulator, you will likely have to provide a COI when you are up for renewal.
Contact American Tri-Star Insurance today to make sure your business is adequately covered. In addition to general liability policies, we also offer commercial auto, workers’ compensation, EPLI, and umbrella insurance in San Diego. Call 619-272-2100 today to receive a free quote from one of our friendly agents.