If a party wants to confirm proof that another party`s insurance is in place to cover property or bodily injury, that`s one thing. They could ask to see their insurance policy. However, another thing is when a party (for example. B, “Real Estate Corp.”) hires the other party (e.g.B., “Paul the Plumber LLC”) for a project and asks Paul the Plumber to issue an IOC. As described above, the IC is a concise document that contains all the relevant details of an insurance policy in a standardized and easily digestible form. For example, if the contractor`s limit for each event is $1,000,000, the contractor`s insurance company may require the subcontractor to provide a certificate proving the same coverage ratio. Otherwise, the auditor will not accept the subcontractor as “sufficiently insured” and a fee will be charged to the contractor as if that subcontractor were not insured. Uninsured or underinsured contractors can significantly increase your premium. To protect your business, you will always receive a CI when hiring an independent contractor who will perform work for your business during the insurance period. During your annual awards audit, auditors will ask you to verify this certificate. If you do not have these certificates, or if your independent contractors do not purchase workers` compensation insurance, you may be charged an additional premium to assume the risk of loss.

General liability insurance covers certain risks and varies depending on the coverage the subcontractor needs for its business activities. In addition, contractors should be aware of the coverage that subcontractors must have for projects and ensure that they have that coverage. Manual tracking of insurance certificates (COI) is a time-consuming process. For entrepreneurs, it may seem easier to skip this step completely. While it may seem easier to believe that a subcontractor has the right coverage, it is necessary to ask for conflicts of interest for subcontractors. By carefully documenting all third-party insurance certificates, you will be well prepared to transfer the loss to that third-party insurer in the event of a problem. Most insurance companies consider a limit of at least $300,000 per event to be “adequately insured.” However, some insurance companies require the subcontractor to have a limit equal to the contractor`s limit under their own policy. Insurance certificate collection and tracking software prevents contractors from being responsible for a subcontractor`s employees in the event of an accident on a construction site. To this end, the software helps contractors collect, track and ensure coverage for all subcontractors. While you may require your partners and suppliers to purchase insurance in your policies, coverage requirements can change quickly, so it`s necessary to regularly review policies. In addition, contractors and sellers may not be honest about the insurance they have, so you mistakenly assume that you are protected. Specifically, when Real Estate Corp.

asks Paul the Plumber to issue a CI, it requests that its policy be “approved” (also called “amended”) so that the policy can extend “additional insured” status to Real Estate Corp. That way, if Real Estate Corp. is sued for an incident related to Paul`s work, they should also be covered by their insurance. Often, a subcontractor does not wear the coverage a contractor needs. In any case, if a subcontractor does not have the necessary coverage, a COI will verify that he has received the right coverage to protect himself and his contractor against the risks associated with his operation. A CI is important in these situations because it confirms that the subcontractor is respecting its contract. Because every time a contractor has to deal with a subcontractor, they are exposed to a risk. By collecting CONFLICTS of interest for subcontractors, contractors can transfer the risk to the subcontractor. To protect themselves from this type of risk, many companies turn to insurance certificates (COI). .