Published October 14, 2022 • 5 minute read
Businesses often require third parties to hold insurance policies to cover costly claims, but to ensure the coverage meets contractual obligations, you’ll need a valid certificate of insurance (COI). This document verifies a policy is in place and details specific parameters, such as coverage type, limits, endorsements, and dates.
While companies working with contractors should carefully track COIs to ensure compliance and mitigate risks, some are unaware of how to collect this critical documentation in the first place.
We’ll explain everything you need to know about the process.
When Should I Obtain a Certificate of Insurance?
Whenever you hire a contractor or book someone you’ve worked with in the past, 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.
Who Do I Contact to Request a Certificate of Insurance?
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, add you as a certificate holder, and secure documentation. Simply contact them with your request.
How Do I Write a Letter Requesting a Certificate of Insurance?
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 requesting a COI gives them the necessary push to begin the process.
These tips will help you craft an effective request:
Use Your Company’s Letterhead
By making the document more formal, you set a professional tone that signals to contractors 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 vendor 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 may be especially important when requesting documentation. If forwarded to an agent or provider, this ensures you are including the necessary information to locate the policy and produce a COI.
Remind Them of the Contract
Your letter should reference the terms of the contract in case the policy is modified to comply with the agreement. Key details such as contract number, limits, loss payee and/or additional insured endorsement requirements, and 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 Certificate of Insurance
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 ask it comes direc
tly from the broker or provider, to limit potential alterations.
How Long Does It Take to Receive a Certificate of Insurance?
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 Certificate of Insurance?
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 Certificate of Insurance, 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 coverages and endorsements your contract requires.
COIs can also be false or forged, and coverage may have lapsed since first issued, so paying attention to the details can help you ensure you’re protected.
Additionally, coverage may only apply to the policyholder, so if your business expects to be protected under your contractor’s policy, you may need to ensure an additional insured endorsement is in place.
BCS: Your COI Tracking Solution
While securing the right documentation can be time consuming, maintaining COIs for your contractors is an important way to safeguard your business.
However, efficiently tracking COIs and mitigating liabilities can be a hassle—especially when managing multiple vendors.
BCS full- and self-service COI tracking seamlessly handles these processes so you don’t have to—leveraging automated software to flag deficiencies, store documents securely in a cloud-based server, and easily return wayward vendors to compliance with just a few clicks.
Streamlined vendor portals, automated requests for proposal (RFPs), and in-app onboarding tools empower your business to easily manage numerous vendors, track COIs, and run projects effectively without sacrificing valuable time, money, and peace of mind.
BCS is the premier COI management solution on the market, with full- and self-service tracking to help build better business connections through streamlined onboarding, automated request for proposal (RFP) broadcasting, and so much more.