The Importance of Requesting Certificates of Insurance
Your business understands the importance of being insured. You have an agent or broker that you trust to assist you. You watch for your policy renewals. You keep copies of your policies, diligently pay premiums, and do everything to keep your insurance policies paid on time and current. You would not think of conducting business without knowing that your company is covered by an active policy.
Unfortunately, the companies/vendors that you choose to do business with can expose your business to risks of which you may not be fully aware. Today's business world is complex. Companies constantly interact and conduct work in all types of relationships with other companies. You may, or may not, have a contract with the other companies. Regardless of the existence of a contract the working relationship may add responsibilities to your company.
Do you know if the other business is insured? If you use subcontractors or employees of a temporary agency and they do not have Workers' Compensation it could become your responsibility if there is an injury. Even if there are no injuries, your own WC carrier may be able to charge you premium for the payroll if the workers are not insured.
Don't expose your company to these risk. Loyalty to a vendor is a great thing. But, regardless of the length of a relationship make it your company's policy to take the extra step to insure your company is protected. Before commencing work require the other company have their broker or agent provide you with a Certificate of Insurance. The certificate is generally done on a standard ACORD form used by all carriers. Review the certificate when you receive it to confirm the types of coverage and that effective dates are current. Make sure your company is shown as a certificate holder and that your address is correct. This will register your company with the broker and if coverage is cancelled they are to notify all certificate holders. Keep the certificate on file in case your WC carrier audits and requests a copy. You should also keep record of the end of the policy terms and request new certificates when the prior policy is expiring. If you have any questions about the adequacy of coverage on the certificate you can always contact your own agent or broker for advice.
It should be your vendor's policy to automatically provide a Certificate of Insurance to prior to the commencement of work. However, if it is not, do not hesitate to ask for as the failure to insure proper coverage puts your company at a substantial and undue risk.
Unfortunately, the companies/vendors that you choose to do business with can expose your business to risks of which you may not be fully aware. Today's business world is complex. Companies constantly interact and conduct work in all types of relationships with other companies. You may, or may not, have a contract with the other companies. Regardless of the existence of a contract the working relationship may add responsibilities to your company.
Do you know if the other business is insured? If you use subcontractors or employees of a temporary agency and they do not have Workers' Compensation it could become your responsibility if there is an injury. Even if there are no injuries, your own WC carrier may be able to charge you premium for the payroll if the workers are not insured.
Don't expose your company to these risk. Loyalty to a vendor is a great thing. But, regardless of the length of a relationship make it your company's policy to take the extra step to insure your company is protected. Before commencing work require the other company have their broker or agent provide you with a Certificate of Insurance. The certificate is generally done on a standard ACORD form used by all carriers. Review the certificate when you receive it to confirm the types of coverage and that effective dates are current. Make sure your company is shown as a certificate holder and that your address is correct. This will register your company with the broker and if coverage is cancelled they are to notify all certificate holders. Keep the certificate on file in case your WC carrier audits and requests a copy. You should also keep record of the end of the policy terms and request new certificates when the prior policy is expiring. If you have any questions about the adequacy of coverage on the certificate you can always contact your own agent or broker for advice.
It should be your vendor's policy to automatically provide a Certificate of Insurance to prior to the commencement of work. However, if it is not, do not hesitate to ask for as the failure to insure proper coverage puts your company at a substantial and undue risk.
