Certificate of Insurance
What is a Certificate of Insurance (COI)?
A certificate of insurance is a document used to provide information on specific insurance coverage. The certificate provides verification of the insurance and usually contains information on types and limits of coverage, insurance company, policy number, named insured, and the policies’ effective periods. Although the certificate should not be substituted for information contained in the actual insurance policies, it is usually a reliable source of information or proof of insurance coverage.
Certificates are usually requested by opposite parties in an agreement, contract, or transaction to make certain the other party has the appropriate insurance coverage.
A certificate of insurance provides proof to a third party that a vendor or other business has adequate insurance coverage. Many organizations need to limit their liability when hiring outside vendors or contractors, and a certificate of insurance helps them place liability for injuries or damages back onto the vendor.
Information Provided in COI; Certificates of insurance don’t just prove you have insurance. They also show what types of coverage you have and the coverage limits. If you are the only employee of your company, you may qualify as a vendor for an organization if you don’t have workers’ compensation coverage. However, if you add employees, you may need to add proof of workers’ compensation coverage to continue as a vendor. In addition, your coverage limits on items such as general liability and professional liability must meet the minimums required by the other business. Most certificates include effective dates of coverage, which means you should send new certificates when you renew or change your insurance.
Why is the COI Process So Important?
COI’s are extremely important to your organization, by Limiting your Insurance Risk!
Caution: If you have expired certificates on hand, you could open your company to liability from damages caused by the vendor. For vendors you only use occasionally, call the insurance company listed on the certificate to verify that the insurance is still valid. Even if your certificate has not expired, the vendor may have failed to pay its insurance or changed companies without supplying a new certificate of insurance for your files.
With VendorTraQ’s COI-TraQ, your organization can track vendor COI’s for contract compliance and identify any potential deficiencies in a vendor’s insurance. COI-TraQ secured interweb system and account managers are monitoring items such as policy expiration dates, coverage limits and carrier A.M. Best ratings. COI-TraQ sends e-mail and text alerts to vendors, along with reports to your agency and insured.
If you are unsure you have a COI process, you are most likely at risk and are open to unlimited liability claims and potential increase in insurance premiums.
VendorTraQ’s recent survey of private country club, non-profit’s, automotive dealership and some light industrial businesses revealed that 100% of GM’s and Controllers surveyed know they are suppose to have a current COI from specific vendors, however they admitted they don’t have a process or even know if the COI’s on hand are current or comply with their own insurance policies requirements.
What is the Goal of COI Management?
We are focused on ensuring that every possible vendor that requires a COI is identified and those certificates are located, verified, qualified and monitored in a secured web based system.Our goal is to help you achieve the ultimate in protection for your operations while ensuring that non compliant sub-contractors, vendor, and other partners are flagged, and that the appropriate actions are taken