When you hire someone to do work in or around your home, you’re usually concerned with the cost of the job and how much time it will take. But there’s one more piece that’s just as important: making sure the person you hire has the right insurance. That’s where a Certificate of Insurance (COI) comes in.
A COI is a simple document, usually a page, that confirms someone has active insurance coverage. It’s not complicated or technical. It’s just proof of insurance, the same way your auto ID card shows that you have liability insurance on your vehicle.
Why is it important to know that your contractor is insured?
What a COI shows you
When you ask your contractor to provide their COI before they begin working on your home, you will see your contractor’s name, their insurance company, the types of policies and the amount of coverage they have, and the policy effective dates.
If a worker accidentally damages your siding or a power tool causes an injury, the COI is your way of ensuring you’re protected from those kinds of surprises. It’s very important to ensure your contractor has insurance in place before they start working on your property.
Why you should ask for one
Many homeowners hesitate to ask for a COI because they don’t want to seem demanding. But responsible contractors expect questions about insurance. In fact, legitimate companies typically keep COIs ready to send out because they know homeowners rely on them. Additionally, some city permit offices and homeowners associations require a COI before they’ll approve a project.
If someone refuses to provide a COI, gives excuses, or claims it’s unnecessary paperwork, consider using someone else. A contractor who is properly insured should have no issue proving it.
What a COI doesn’t show you
Even though a COI is important, it’s not a guarantee. Like your auto ID card, it represents only a snapshot in time.
It doesn’t confirm that the contractor will keep their policy active for the entire project. And it doesn’t automatically cover you under their policy.
To be covered under your contractor’s insurance policy, ask to be named as an “Additional Insured.” This extends your liability protection against claims arising from the project. For example, say a worker is injured and files a lawsuit against the contractor. They also name you, the property owner, as part of the lawsuit. If you’re named under the contractor’s insurance policy as an Additional Insured, their insurance will deal with the lawsuit and not yours.
Finally, a COI doesn’t replace references or interviews. You’ll need to do your own research to understand who the business employs, whether they use subcontractors or do the work themselves, and whether they follow ethical and safe practices.
What to look for in a COI
A service provider can manipulate the COI to change the level of coverage or policy dates. Contact the insurance agent (listed under “Producer”) or insurance company (listed under “Insurer”) to verify that the coverage is accurate.
Check that:
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The name of the business or service provider matches the one you hired (listed under “Insured”)
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The policy dates cover the time they’ll be working for you
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The type of work they are doing for you is reflected in their coverage
Verify the COI each time you hire someone, even if you’ve worked with them before. They shouldn’t be offended that you check their insurance; it’s part of doing business.
A COI is a simple step that can protect you
Home projects come with enough planning and stress. A COI can help prevent bigger problems later. It ensures that if an accident occurs during the job, the contractor’s insurance responds.
Contact us if you need help with a COI or to check your insurance before your next project. We review COIs regularly and can point out any red flags.
Choosing the right insurance agent is one of the most important decisions you will make. The Turner Agency, Inc. is a local Trusted Choice® independent insurance agency headquartered in Greenville, South Carolina. Serving the Upstate of South Carolina and beyond since 1962, we offer a variety of business and personal coverage choices and can customize an insurance plan to meet your specialized needs.
The information in this article was obtained from various sources and is not all inclusive regarding the subject matter. This content is offered for educational purposes only.
