Certificates of Liability Insurance can be used to demonstrate proof of coverage, which is often a key step in securing a new contract.
For example: Imagine you’re about to close a contract with a new client. However, the contract requires you to have a Certificate of Liability Insurance that shows you have $1 million in Errors and Omissions Insurance before they’ll sign any paperwork. If you already have an E&O policy with a $1 million limit, you can request a Certificate of Insurance from your provider.
A client may ask you to provide a Certificate of Liability Insurance for a number of reasons, including…
- Their insurance provider requires proof of coverage. Many insurance providers require proof of insurance for all contractors and business partners of their policyholders. Your Certificate of Liability Insurance serves as proof of your coverage.
- They want reassurance that you’re covered. Even if their insurance providers don’t require proof of coverage, your clients may want to know you have business insurance. Why? Because when you have a policy in place, it means you have the financial backing to compensate them for losses if anything goes wrong.
- They want all your insurance information in one place. Certificates of Liability Insurance are concise and information-dense. Your clients can easily find any information about your coverage they need without combing through pages of paperwork.
Insurance certificates simplify the process of signing contracts. They provide a quick way for businesses to exchange important information about their coverage in an easy-to-read document they can keep on file.
Certificates of Liability Insurance are useful because they allow contractors, freelancers, and small-business owners to demonstrate proof of insurance and share coverage information with clients through a single-page document rather than an entire insurance policy.