When embarking on home renovations or improvement projects, hiring a contractor is a crucial decision. Whether you’re remodeling your kitchen, adding an extension, or fixing a leaky roof, it is essential to ensure that the contractor you hire has the necessary insurance coverage. One key document that provides peace of mind for both you and the contractor is the Certificate of Insurance (COI).
What Is a Certificate of Insurance?
A Certificate of Insurance (COI) is a document issued by an insurance company to verify the existence of an insurance policy and provide essential details about that policy. These are the key points you should know about COIs:
- Proof of Coverage: The COI serves as evidence that the contractor has insurance coverage in force the day the certificate is issued. It offers a summary of certain aspects of the policy, including the policyholder’s name, effective date, type of coverage, and more.
- Liability Protection: As a client, you want to know that the contractor has liability insurance. Without a COI, you might assume the risk of any costs resulting from accidents, damage, or substandard work caused by the contractor.
- Risk Mitigation: COIs are especially useful in situations where liability and significant losses can be an issue. If something goes wrong during the project, having a contractor with proper insurance coverage can save you from financial headaches.
- Effective Date Verification: When requesting a COI, ensure that the policy’s effective date is current. You don’t want to rely on outdated coverage.
- Include It in Contracts: If you have a written contract with the contractor, include a clause requiring COI verification. This makes sure that both parties are aware of insurance coverage.
- Ongoing Communication: If you work with the same contractor multiple times, periodically check their COI. Insurance coverage can change, so staying informed is essential.
A Certificate of Insurance is a powerful tool for protecting yourself when hiring a contractor. Don’t hesitate to ask for one—it’s a small step that can make a big difference in the success and safety of your home improvement projects and a reputable contractor should be happy to provide it.
If you’re interested in learning more about getting general liability insurance coverage and getting a COI, then contact Chastain Otis and see how we can help with your coverage.