As a contractor, a key step in landing a new contract is giving a client your certificate of insurance. This document shows that you have the necessary coverage, which means that your client won't be liable for workplace injuries or accidents while you're on the job.
To help you understand what you'll be presenting to your client, here's a workers’ comp certificate of insurance sample:
Now that you've seen what a sample certificate looks like, let's delve into the details of what each section means for you as a contractor. Don’t worry, it’s not as scary as it looks!
This abbreviation shows which insurance company is providing the policy.. You'll find a corresponding list of insurers in the top right-hand section of the certificate, allowing you to match the abbreviation to the insurance company.
This section lists all the insurance coverages, with workers' compensation and employer liability being the primary focus for contractors. It's important that these are clearly noted so your clients don’t have any concerns about your policies.
Owners are generally not required to have workers' comp insurance. This part of the certificate addresses whether the owners are excluded from the policy. Some clients might want all working individuals, including owners, to be covered under the workers' comp policy.
Workers' comp insurance is strictly for employee coverage and doesn't extend to clients or other third parties. Therefore, on a workers' comp certificate, "N/A" is listed under additional insureds, as it's not applicable.
If a client asks to be added as an additional insured on your workers' comp policy, they’re probably looking for a different form of protection such as being named on your general liability policy, becoming a certificate holder, or requesting a waiver of subrogation. Clarify their request to make sure you are providing the right documentation.
If there's any confusion, consult your insurance provider for accurate guidance.
Waiver of Subrogation is an endorsement that your insurance company agrees not to seek compensation from a third party in the event of a claim.
While not always required, it's common in construction contracts and sometimes in non construction contracts. Whether your policy includes a blanket waiver or a specific one will depend on the agreement with the person who requested the certificate otherwise known as the certificate holder.
The section for WC statutory limits is generally marked off, indicating that your coverage meets or exceeds the state's minimum legal requirements. This is standard.
This part of your policy specifies the limits of coverage in the event of a lawsuit due to work-related injuries. Standard limits are often listed as $500,000 per accident/$500,000 policy limit/$500,000 per employee, but in construction, they are typically $1,000,000 across the board.
If your client requests higher employer liability limits, you may need to speak to your agent to modify your policy accordingly.
Here, you or the certificate holder can include any additional notes or specific instructions pertinent to the project. This section can be customized to the unique needs of the job you're working on.
The certificate holder is the person who requested the certificate. As such, this section should include the information for the entity requesting proof of your workers' compensation coverage.
When you're asked for a workers’ comp certificate, make sure to get the exact legal name of the certificate holder. Whether it's a subsidiary or a parent company, the name must be precise to avoid any administrative hiccups. Incorrect information can lead to requests for a new certificate, which could delay your project.
Are you ready to take the next step in securing your business and satisfying your clients? Start an instant quote now and obtain your workers' compensation insurance certificate within 24 hours after binding your policy.
Don't let insurance be a barrier to your next job—ensure you're prepared and protected with the right coverage.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.