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19 December, 2019 0
person looking over contract, understanding certificates of insurance

How Do You Decipher Certificate of Insurance Forms?

How to read certificate of insurance forms.

As a business owner, you may need to hire a contractor to work for your company.  In this situation, you need to verify that the contractor is carrying the right commercial insurance in Los Angeles, California, to cover their own liability issues and worker injuries.  Contractors confirm their coverage through a special form known as a certificate of insurance.  But what information does this form provide, and how can you verify that the form is legitimate?  Here’s what you need to know.

  • What is a Certificate of Insurance?

A certificate of insurance form is a document that businesses use to show proof of insurance.  This document lists the business’s liability insurance policies, their coverage limits, and the dates during which their policies are effective.  When a contractor is able to produce a certificate of insurance, it offers you peace of mind knowing that they have enough coverage to cover any issues related to their work.  This ensures that your business will not be responsible for such claims.

  • Why Are Certificates of Insurance Important?

Certificates of insurance ensure that contractors or company partners have coverage to address the claims arising from their own mistakes.  Before signing off to work with a contractor, you should read over their certificate of insurance to make sure that your business is protected if the contractor is not as skilled as promised, is involved in legal disputes that they have not disclosed to you, or tries to fool you with expired insurance policies.

  • How Do You Read a Certificate of Insurance?

When you read through a certificate, you should look for specific things.  To start, you should make sure that the name on the certificate matches the name of the contractor.  You should then verify that the policy expiration date does not happen before the contractor’s work is scheduled to end.  If it does, then you will need to request another certificate confirming the contractor’s policy renewal.  When looking through the listed coverage, you should verify that the contractor has general liability and workers compensation insurance.  These coverages ensure that third-party loses related to the contractor’s work, and any injuries sustained by the contractor’s employees will not fall on your shoulders.  Finally, you should make sure that the contractor’s coverage limits meet or exceed the limits of your own insurance.  If they do not, request that they secure additional coverage.  This ensures that they do not run out of coverage and turn to you for assistance.

This is what you need to know about certificates of insurance.  Do you have additional questions about your commercial insurance in Los Angeles, California?  If so, then contact the experts at Fuller Insurance Agency in Southern California.  We are ready to assist you with all your business insurance needs today.

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