What is a Certificate of Liability Insurance?

A certificate of liability insurance is a one page document that verifies the existence of insurance coverage.  The certificate includes the insured party’s name, the insurance company’s name, the policy number, the effective /expiration date, the type of insurance coverage and dollar amount.

With this one piece of paper you can provide extensive details about your insurance policy to anyone.  You may ask yourself “who would need to see my insurance certificate?”  Before agreeing to sign a IT consultant contract your client will ask for proof of insurance.  They demand this when liability and large losses are a concern.  For example in the event of a bodily injury or property damage caused by you while doing work on their behalf or at the client’s site your client will be defended under your policy just as you are.

The following may also be provided on your certificate of liability insurance:

1)      Certificate holder- a certificate holder is anyone who is named in and insured by the insurance policy.  In some cases clients may ask to be named as a certificate holder to ensure that they’ll be notified in the event that your policy is canceled before its expiration date.

2)      Additional Insured- this refers to anyone else besides the policy holder who is covered by an insurance policy.  A certificate of insurance typically includes a list of additionally insured parties, if they exist.  For the purposes of most tech firms, additionally insured parties would include your customer or clients.  People who are “additional insured” can receive coverage benefits if the work you do on their behalf leads to an injury or property claim against them.

Typical Contract Language-“Insurance required will name Client as an additional insured with respect to Client’s insurable interest, will be primary or non-contributory regarding insured damages or expenses, and will be purchased from insurers of sound internationally recognized financial standing.”

Certificates of insurance also include language that indicates that, if an insurance policy is cancelled, any and all certificate holders will be notified.  ‘Certificates of Liability Insurance evidencing the required coverage and limits shall be furnished to Client prior to the commencement of any work hereunder and shall provide that there will be no cancellation or reduction of coverage without thirty (30) days’ prior written notice to Client.”

The certificate of insurance is your key to doing business and a crucial document that you need access to all the time.  With our great certificate department you are one email away form receiving or sending your certificate to clients. Anytime you have a request, our certificate department is here to help.  The one thing your insurance certificate cannot do is grant you any of the policy benefits. You will need to have a copy of your full insurance policy to do so.