A certificate of insurance shows proof to a third party that your home based business has obtained insurance coverage. This is one resource you should absolutely invest in, and here’s why: let’s say that you’ve landed a new client and are eager to start working. However, before you can begin, the client requests a copy of your insurance certificate. Don’t have it? Then you may have just lost that client forever.
If you don’t have a certificate of insurance, also known as “Proof of Insurance,” then don’t worry – late is better than never. Issued by an agent or insurance company, this simple document verifies your small business has purchased coverage. The document will show what type of coverage it is, the effective and expiration dates of your policy, and more importantly, your limits of liability coverage.
Typically, someone might ask for your insurance certificate when there’s potential liability involved for that third party. For instance, if you’re providing data recovery services for a client, they may request proof of insurance. This will give them confidence that specific liabilities will be covered throughout the course of the project. No matter what industry you’re in, or who your clients are, having this certificate on hand will provide both of you with peace of mind.
Many potential clients simply won’t opt to work with you if you can’t present proof of insurance. Put yourself in their shoes: would you hire a contractor who couldn’t present evidence of coverage? Of course not, and you shouldn’t expect clients to do this either. Similar to how an insurance card would show confirmation of your health plan, a certificate of insurance demonstrates that your small business is covered. This ultimately gives clients the confidence to work with you.
Typically, the insurance certificate is issued upon your request. Remember that this document contains less information than your standard insurance policy papers – it simply serves as a means of proof that your business is actually covered.
Don’t be alarmed or taken off guard if a client requests the addition of their name or business as a certificate holder on your certificate. Often times, this is easily accommodated, but you must submit a request to your insurance agent so that they can review and issue your certificate accordingly.
Don’t wait until a client asks you to provide evidence of business insurance coverage – be proactive and have your document ready. That last thing you want is to hurt your company’s reputation and lose clients because you have not requested your insurance certificate. Contact Lindbergh to acquire an insurance policy that will best suit your home business. Then, whenever a client asks for proof of insurance, you can be confident that you’ll be ready.
1. Certificates of Insurance / Proof of Insurance – https://www.fivecolleges.edu/riskmgmt/forms/certificates-of-insurance
2. Do Certificates of Insurance Matter? – http://www.insurancejournal.com/news/south-central/2010/11/17/114977.htm#
3. Who Needs a Certificate of Insurance? – http://www.tiscinsagency.com/risk-obtainacertificate.php