Similar to an insurance card, a certificate of insurance is a document that shows insurance coverage.
Basically, it’s a document that summarizes your policy’s details and provides some basic information about your policy’s coverage.
This article will explain what an insurance certificate is, how to obtain one, who might ask to view one, and why it is so relevant.
Explaining A Certificate Of Insurance
This document summarizes your business insurance policy. A certificate of insurance is different from an insurance policy because policies are legally-binding contracts between you and the insurer, but certificates are not. It contains basic information about your coverage and only reflects what’s written in the policy.
A certificate of insurance includes the following information:
-The expiration date of the policy
– The effective date of the policy
-Insurance company
-Covered parties, including additional insureds
-The type of insurance (e.g., general liability, workers’ compensation, professional liability, automobile liability, umbrella protection)
-Exclusions and limits of coverage
-The policy number
Similar to an insurance declaration page, it usually outlines the key features of your insurance plan. It is also known as a COI, proof of insurance, or certificate of insurance.
These documents are provided in standard forms. Acord 25 forms are commonly used by insurance agents, and some call them Acord certificates.
Certificates Of Insurance: What Is Their Purpose?
A certificate of insurance proves that a small business owner has adequate insurance coverage.
Anyone who asks you about your insurance policy can see it. Risk management lets others know that you’re insured in case of liability.
You might be hired to assist a contractor if you run a landscaping company. A contractor will want to ensure that you have the appropriate insurance levels before you sign the contract.
As a result, in case property damage or bodily injury occurs on the job, your insurance company will handle the claim instead of the contractor’s.
In addition to requests from your subcontractors, you might also need to request COIs from other businesses you work with. In the event of an audit, asking your subcontractors for their Certificate of Insurance can prove that they carry workers’ compensation and general liability insurance.
By doing so, you do not have to pay a premium for the use of uninsured subcontractors. Nobody wants to be surprised with a premium during an audit.
The following situations may require a certificate of insurance:
-A prospective client wants to hire you to install a brand-new roof. If anything goes wrong, they expect you to be insured.
-In the course of submitting a bid for a project, one of the requirements is to submit proof of insurance.
-The owner of a nail salon wants to develop a partnership with a cosmetic business. In the event that any of your clients react negatively to the polish and sue, you will want to make sure it has the right insurance in place.
You could be asked for a COI by any company you work with or a client you serve. As a result, you won’t have to file a claim under their policy if something turns out wrong. As a business owner, you can also request a
Certificate of Insurance. This will help you and your company minimize risks.
How Do You Get A Certificate Of Insurance?
If you are asked to provide a certificate of insurance, ask your broker to provide it.
The certificate is usually free. Depending on your broker, you may have to fill out a form online with your name and address.
Take note of these general guidelines when reviewing your COI:
-Confirm that the business name entered is correct. You must be listed as a policyholder if your business is under your name. If your business is an LLC, it should be listed instead. You or your DBA can be included if you’re working with a DBA.
-Ensure that the certificate holders and additional insured are listed correctly. Make sure every person listed on your COI has correct spelling and contact information. To add any additional insured, you should contact your broker.
-Make sure your policy hasn’t expired now. If your policy is about to expire, contact your broker right away.
In addition, make sure that your coverage limits match those of the entity requesting the COI. Request that your broker implements the changes required to bring your plan up to their standards if they are not.
Does It Take Long To Get A Certificate Of Insurance?
It may be possible for you to get a COI instantly if you don’t need to make any changes to your insurance coverage. It may take your insurance company up to 48 hours to handle your request.
Changes may take longer if they are necessary. You should not wait until the last minute to take care of this task, in case your insurer takes a while to respond.
How Does A COI Work?
A certificate of insurance shows that you are covered by insurance to another company or individual. Forms like these are typically needed at the beginning of a new project or when hiring new employees.
If you don’t already have a policy, you’ll need to apply with your broker insurance company first if you’re asked to submit a COI. After the policy has been activated, you can request an insurance certificate.
You might also have to make changes to your policy before requesting the COI. You’d either have to decline the project or obtain the correct insurance coverage if the project manager requires commercial general liability and you only have professional liability.
A certificate of insurance can prove that the new policies have been renewed if you choose to add or update your insurance.
What Is A Certificate Holder On A COI?
You might be asked to be listed as a certificate holder when a company requests a certificate of insurance.
As a result of this process, your insurance plan is not altered or changed in any way.
Your certificate holder will be notified if your insurance policy changes or if you cancel your policy.
The insurance company can add the certificate holder on your behalf.
It will also handle all updating for you.
Who Needs A Certificate Of Insurance?
An insurance certificate may be required for anyone with a business. Generally, this occurs when businesses have greater liability for damage or loss. These include:
-General contractors
-Specialized subcontractors such as electricians, roofers, and window cleaners:
-Delivery drivers
-Tech specialists
-Consultants
Whatever kind of business you run, proof of insurance may be required.
A Guide To Verifying Certificate Of Insurance
In the event, you ask a small business owner for a certificate of insurance, you need to be aware that such forms can be faked.
The information on such documents may also be incorrect.
COIs are just references to insurance coverage and are not legal documents. Thus, a certificate of insurance that someone gives you does not prove they are insured.
You should verify any COI you receive since it may contain incorrect information.
Here are a few things you can do to verify authenticity:
-Please review the policyholder’s contact information carefully and confirm that it matches the person or company you are working with.
-Ensure that the policy limits correspond to your requirements.
-Verify the policy’s expiration date and see if the policy is still valid when your project is completed. Before the old COI expires, ask for an updated one.
-Verify coverage by contacting the agent or broker using the insurer’s information on the card.
Prevention Is The Key To Avoiding Accidents
Ask your broker for a certificate of insurance if you are asked to produce proof of insurance.
In this way, everyone can see what kind of insurance plan you have. Insuring yourself can help minimize your risks and increase your chances of getting contracts.
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Employees rarely need to think about workers’ compensation later on because most large employers go over them during the hiring process.
In the event of an injury on the job, what happens if there is no workers’ compensation? Are you protected from medical costs once you get hurt? Today, we want to walk you through what we recommend doing for an employee without workers’ compensation.
Before we begin, if you are in the hiring process and your new employer hasn’t gone over the workers’ compensation package, be sure to ask.
One thing to keep in mind is knowing your options if you get hurt. Furthermore, if there is not yet a workers’ compensation package, you might be able to persuade them to get one at least and use it as a tool for negotiating.
Workers’ compensation insurance is required in most states. In some cases, there are exceptions, but most of those involve sole proprietorships or small businesses with few employees.
If you do not have workers’ compensation insurance, what can you realistically expect?
There are several factors to consider. Let’s take a look.
What To Do If You Are Injured
The first thing you do when injured at work is to seek medical attention, right? That’s the most critical thing to do. The sooner you seek help, the better the chance you have of recovering quickly. Next, it is important to begin documenting the process.
The first step is to inform your supervisor of the injury. If you don’t report the accident, you don’t have any evidence that the injury occurred at work. You must report the incident and document your injuries regardless of whether your company offers workers’ compensation. You should report this verbally, via email, text, or by phone as soon as possible. Keep a record of all correspondence, doctor’s visits, and hospital bills from now on. If you decide to ask your employer to help you cover the costs, you might need these documents.
What Happens If You Don't Have Workers' Comp?
Worker’s compensation coverage is another thing you have to consider and budget for.
Your business size will affect the cost of workers’ comp.
Workers’ compensation insurance is regulated by the state where you live, so there is no one hard and fast rule.
You can find the rules that apply to you by browsing the workers’ compensation laws of each state at the National Federation of Independent Business.
You are likely required to carry workers’ compensation insurance, if you have employees (whether they’re full-time or part-time). This regulation is based on how many workers you have; some states require workers’ compensation coverage even if you have one employee while others require three employees.
Without Workers' Comp, Here's What Happens
If you don’t have workers’ compensation insurance and have employees, what do you do?
A violation can result in fines, lawsuits, and even prison time. The penalties for not carrying a workers’ compensation policy will vary from state to state.
The majority of health insurance companies do not cover work-related injuries.
As a result, if you are injured at work, you will not only have to pay for your medical treatment, but you will also lose out on wages.
If your boss doesn’t have workers’ compensation insurance, you have two choices: sue them for personal injuries, or check with your state’s Labor Department for government coverage.
Filing a lawsuit against your employer can have its benefits and drawbacks. One of the most obvious reasons is that the process may take months or even years to complete. It’s a long time to wait for your medical bills to be paid. During that period, you won’t receive a paycheck, and you’ll also have to pay the legal fees.
However, the courts may also award you benefits that are not covered by workers’ compensation, such as future lost earnings, punitive damages, and pain and suffering; in the event that you win your case.
The Uninsured Employers’ Funds or something similar is provided by many states for people injured at work by uninsured employers.
Through this program, you may be able to get your medical bills covered and receive payment for some of your lost wages. You can contact your state’s workers’ compensation office for assistance. In some states, there are also temporary disability programs that provide short-term benefits while you are unemployed.
Additionally, injured workers can sue companies that should have had workers’ compensation but didn’t.
If You Have No Employees
Perhaps you are self-employed, you’re a single-person business and proud of it.
You don’t need to acquire workers’ compensation coverage in this situation.
In any case, it may be a smart investment to protect yourself against a major financial burden in the event that you are injured on the job.
When It Comes To Independent Contractors
Let’s say you don’t have any employees at your company, but you work with many independent contractors.
You’ll have to check what the state’s workers’ compensation requirements are for independent contractors.
Many states view independent contractors as employees, which means you need workers’ compensation insurance to cover them.
Your state’s laws and views on independent contractors will play a large role in this, as well as whether you’ve correctly classified the worker.
Employees who are misclassified as independent contractors are subject to penalties and headaches.
When the person is actually an independent contractor and your state does not require you to provide them with workers’ compensation insurance, then you are not required to provide them with coverage.
That doesn’t mean an injured contractor will not sue you to try and recoup those wages and cover medical costs.
If you misclassify an employee as an independent contractor in order to avoid paying for workers’ compensation insurance, then you are going to face state penalties for not providing the necessary insurance as well as fines for misclassifying an employee.
Florida Personal Injury Claims
In Florida, injured workers cannot sue their employers, and instead must rely on the exclusive remedies provided by workers’ compensation law.
There are some exceptions, however, in which an employee can bring a personal injury lawsuit against their employer.
In this case, they are required to demonstrate that they were injured as a result of an intentional act or commission by their employer.
Any claim for personal injury must be substantiated by negligence. Therefore, you will need to prove that your employer was negligent and that this directly resulted in your injuries.
Workers’ compensation claims have a two-year Statute of Limitations, whereas personal injury claims have a four-year Statute of Limitations. Although this is the case, you should ideally begin the process as soon as possible.
In order to preserve evidence, you will have to:
-Keep a record of how the incident occurred as soon after it happens as possible.
-Get the names and contact information of any colleagues or members of the public who witnessed the incident
-Get pictures of any visible injuries as soon as possible
-A personal injury attorney can help you determine whether your claim against your employer is valid before you make any written or verbal statements to your own insurance company
You also need to prove that your employer:
-Failed to fulfill the duty not to injure you
-The failure directly contributed to your injury
-You suffered damages as a result of being injured while at work
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Businesses and self-employed contractors might want to consider getting a policy that protects their business if they get hurt at work instead of skipping workers’ compensation protection.
As a leading small business insurer, PEOPayGo is a great option.
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As a result of its prevalence in American history, it’s not surprising that most states require employers to carry self employed workers comp insurance, even for small businesses. This type of policy protects both the self-employed individual and anyone they may hire.
If you’re unable to work due to a work-related injury, self employed workers comp can provide crucial benefits during recovery. It also protects your business from legal action in the event of a workplace accident. While you’re not required to carry a policy if you’re a sole proprietor or in a partnership with no employees, it’s still a smart safeguard.
Once you hire anyone, even casually, you become liable for anything that happens to them on the job.
Workers' Comp for Self-Employed
As with full-time employees, independent contractors are also prone to injury on the job. You may also have to consider other safety or health concerns based on the industry you work in.
Independent contractor insurance protects you financially in the event that you are injured while performing contract work.
Workers’ compensation insurance protects independent contractors not only if they’re injured on the job, but can also help keep them out of financial ruin if a subcontractor is injured.
When you have workers’ compensation, you can focus on the jobs for which you are contracted.
Generally, workers’ compensation plans cover the following:
-Ambulance and emergency room services
-Medical costs (medication, physical therapy, etc.)
-Partially lost wages during recovery
Does Self-Employed Require Workers' Comp?
Generally, state law requires employers to obtain workers’ compensation for their employees, but coverage is usually optional for independent contractors and self-employed individuals.
Solopreneurs should look into workers’ compensation in the following situations:
-Some people face a higher risk of workplace injuries if they work in a high-risk industry. There are a few situations in which a self-employed person may need workers’ compensation. These include repetitive movements, exposure to chemicals, and manual labor.
-Self-employment insurance coverage isn’t optional in every state. Roofing contractors in California, for example, are required to have workers’ compensation policies, regardless of whether they employ workers.
-In addition to meeting contract obligations, independent contractors may find other businesses only want to hire them if they have workers’ compensation coverage. This is because it limits the other business’ liability in the event the independent contractor is injured while working for them.
You should keep in mind, that workers’ compensation is needed by most employers. In the event you hire staff, even if you’re exempt, you’re responsible for getting them coverage.
A Sole Proprietor Should Also Consider This Insurance Policy
In addition to workers’ comp, business owners often purchase general liability insurance.
This is the most important business insurance purchase.
It’s also called slip-and-fall insurance because it covers medical costs if someone gets hurt at your store or office.
General liability covers you whether it’s someone else or your employee who gets hurt or their property is damaged through your work.
What Do You Need To File For Workers' Comp If You're Self-Employed?
When it comes to filing a workers’ compensation claim, timing is crucial.
Once you have sustained a work-related injury or illness, you have a limited amount of time to file your claim.
If you miss the deadline, your insurance company may reject your claim.
Contact your insurance company to ensure you have the necessary forms and contact information at hand to report and document the incident.
The provider will send you payment details if they approve your claim. If the claim is denied, you may request a reconsideration or file an appeal (usually through your state’s workers’ compensation board or commission).
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Protecting yourself and your business doesn’t have to be complicated. With PEOPayGo, getting workers’ comp coverage is quick, easy, and cost-effective.
Our all-in-one PEO solution bundles payroll, HR, and insurance, so you can focus on growing your business while we handle the rest. Just answer a few questions and let our Instaquote tool do the heavy lifting, it only takes 2 minutes!
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