Do businesses need a certificate of insurance?
A certificate of insurance (COI) can be used to show that a business has insurance, usually something like general liability insurance coverage.
Businesses sometimes need prove they have insurance before getting a major contract. For example, contractors might need a COI before bidding on commercial projects. Vendors might need a COI before selling at a fair or festival.
If one is needed, obtaining a COI is easy. Insurance companies regularly issue them, and an insurance agent can help businesses get one. It’s good to leave at least a business day for getting the document, but often a COI can be obtained on the same day if necessary.
Is general liability mandated by law?
A few businesses might be required by federal or state law to carry general liability, but this only applies to certain businesses. Many businesses aren’t required by law to carry the insurance.
General liability is still widely recommended regardless of whether it’s required by law, however. Not having the insurance can lead to devastating financial costs if there’s a basic accident.
What is an “additional insured” on a general liability policy?
Many general liability policies can list “additional insureds.” These are distinct entities, usually other businesses or organizations, that might file a claim against the policy.
Businesses might have to list an additional insured for certain contracts or opportunities. Like a COI, an additional insured is easy to take care of and something an agent can assist with.