Published January 05, 2021 • 3 minute read
Businesses often require workers to hold relevant insurance policies to shield against costly claims, but to ensure the coverage meets contractual obligations, you’ll need a valid certificate of insurance (COI). This document verifies that a policy is in place, and details specific parameters, such as coverage type, limits, endorsements, and dates.
While companies that work with contractors should carefully track COIs to ensure compliance and mitigate their risks, some are unaware of how to collect this critical documentation. We’ll explain what you need to know about the process.
Who Do I Contact to Request a COI?
Your Third-Party Contractor
Contractors can reach out to their insurance broker or provider directly to discuss whether their current policy meets contractual requirements, purchase any necessary riders, have add you as a certificate holder, and secure documentation. Simply contact them with your request.
How Do I Write a Letter Requesting a COI?
If insurance coverage is dictated clearly within the contract, experienced contractors may automatically provide a COI. However, others may need a nudge. Writing a formal letter asking for a COI can give them the push necessary to help shore up your liability protection.
These tips will help you craft an effective request:
Use Your Company’s Letterhead
This can make it more formal, and signal to workers they should read the letter carefully. If you do not have company letterhead, be sure to include your organization’s legal name and registered address so the contractor can share it with their broker/provider and will know where to send the COI.
Include the Vendor/Contractor’s Name & Address
Listing the recipient’s name and address is standard protocol for most formal business letters, but it may be especially important when requesting documentation. If forwarded to an agent or provider, this ensures the necessary information to locate the policy and produce a COI is included.
Remind Them of the Contract
Your letter should reference the terms of the contract in case the policy must be modified to comply with the agreement. Key details such as the contract number, limits, loss payee and/or additional insured endorsement requirements, and the pertinent date range are often helpful to restate. You may also include a copy of the contract for reference.
Explain Where & When to Send the COI
To make compliance as easy as possible, be specific about where the COI should be sent, and in what time frame. Ideally, you should have the document in hand before the contractor completes any work on the project. If you’re requesting a paper copy of the COI, you may wish to request it comes directly from the broker or provider, to limit potential alterations.
How Long Does It Take to Receive a COI?
Obtaining a COI may take a few days to weeks, depending on how quickly the broker can complete the paperwork. Some providers also allow policyholders to download a certificate of insurance through their website once the policy has been issued, which is typically much faster.
Is There a Cost Associated With Requesting a COI?
There should not be a fee for receiving a COI. This service is traditionally offered for free by the insurance company and/or broker. Some agents may charge a small sum or include COI issuing as part of an annual service fee to the policyholder. Those with the COI readily available online for download or at-home printing rarely charge.
Once I Get a COI, Does That Mean I'm Definitely Covered?
Having a COI does not mean you’re fully covered. Carefully review the document to ensure it lists all the coverages and endorsements your contract requires.
COIs can also be false or forged, and coverage may have lapsed since they were first issued, so paying attention to the details can help you ensure you’re protected. Additionally, the policy may only apply to the policyholder, so if your business expects to be covered by your contractor’s policy, you may need to ensure an additional insured endorsement is in place.
When Should I Obtain a COI?
Whenever you hire a contractor or book someone you’ve worked with in the past for a new project, you should get COIs for all relevant insurance policies as soon as possible, preferably before they do any work. You may also need to obtain a COI if you lease property or equipment. This documentation should be refreshed whenever the policy changes or is renewed.
While securing the right documentation can be time consuming, maintaining COIs for your contractors is an important way to safeguard your business.
The BCS App simplifies the process of collecting, correcting, and protecting COIs. It streamlines vendor onboarding by enabling contractors to upload their information directly through the app, and you to monitor their compliance without sifting through paperwork. Contact us today to learn more about how BCS can help you track COIs, without the hassle.