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What is Certificate of Liability Insurance?

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Certificate of Liability Insurance

Owning a small business is a dream of many Americans, and you have invested your blood, sweat and tears, as well as your life's fortune, to get yours off the ground. Now it's time to make sure all your work and investment remain safe. There are many reasons to purchase a commercial insurance policy, also known as liability insurance.

Your Business and Liability Insurance

Commercial insurance can help protect your financial investment from the cost of accidents that may occur on your commercial property or from unscrupulous people looking for ways to make their own fortunes, allowing you to continue to provide goods and services to your customers. A liability insurance policy can also cover the financial costs of libel and slander cases that may be waged against your company. In addition, many reputable contractors and vendors will only work with companies that can show proof that they have liability insurance.

What Serves as Proof of Liability Insurance?

A certificate of liability insurance, also called a COI, a general liability insurance certificate or an ACORD 25 form, is a document that shows proof that your company carries liability insurance. You may be required to provide proof of this type of coverage if you begin working for or with a new business entity. Some examples of when you might need COI documentation include:

  • If you move into a rental property
  • When you use a new vendor
  • If you apply for financing through a bank
  • When you're looking to expand, build on or renovate your commercial property
  • If you merge with a larger company or start a business relationship with another business entity

While the general liability COI is the most commonly used form for small businesses, there's also an ACORD 27 or 28 document that shows proof of property insurance.

What Does a COI Look Like?

Similar in function to an automobile insurance card, a certificate of liability coverage serves as physical evidence that your company has liability insurance. The document provides identifying information such as the legal name and address of your business, as well as the name of your insurance carrier and policy information, including the policy type, coverage start and expiration dates, and policy limits.

In addition to this standard insurance information, a COI has a description box to denote extra details, as well as the name of the company or individual that requires the proof of liability coverage. This may be the landlord of the building your business is located in or a contractor who is going to renovate your home office.

Additional Features of a Certificate of Liability Insurance

In most cases, you only need the basic information provided on your COI document to show proof to other business entities that you have liability insurance. However, there may be occasions when you wish to create a partnership with a particular vendor or contractor who wants more than evidence of insurance coverage. Some companies will ask that you include them as an insured party on your policy to ensure they are financially covered if something happens to them as a result of your business operation.

To add another person or entity to your COI, you can check the box in the column labeled "additional insured" (often abbreviated as ADDL INSD). Checking this box on your certificate and noting the party's name as the Certificate Holder or noting it in the form's description box effectively adds that entity to your policy.

How to Obtain a COI Document

To obtain a COI document for your business, first you must have a liability insurance policy. If you need assistance in finding a commercial insurance policy for your business, Tivly can help you match your business to an insurance provider that can help you navigate the complex and often confusing insurance market to find a liability insurance policy with the right combination of coverage limits and types to fit your needs.

A COI document is provided free of charge along with your insurance policy. If you need additional copies, you can often print off the documentation directly from the insurance company's website. Some companies may charge a small fee for extra copies, although this isn't a standard policy.

If you have access to a computer with a printer, you can receive a certificate of liability insurance immediately in most cases. If your policy requires particular wording or mistakes are made during the filing process, it can take up to 2 days to receive your documentation.

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