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What is a certificate of insurance?

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Many people often need to hire a building contractor or a paint contractor to complete jobs around their home or small businesses. For your protection, you should learn whether the business or contractor you hire has a certificate of insurance (COI). This is especially important when they are doing a job for you, because of the possibility of accidents. Learn what a COI is, and how it benefits consumers and small businesses.

What is a COI?

•    A certificate of insurance is a document issued by a broker or insurance agent, which summarizes the types of insurance and limits for a specific vendor, contractor or other parties.

•    Typically, a COI contain the policy number, the name of the insured party, insurance coverage, coverage terms and the policy limits in addition to the name of the insurance carrier.

•    Common types of insurance coverage on a COI document include workers’ compensation, professional liability, property coverage, auto insurance and general liability coverage.
Purposes

•    When you hire a CA painter to paint the exterior of your home, the contractor may have employees painting your home. Should an employee fall off a ladder and suffer injuries, workers’ compensation should cover his medical expenses and you should not be financially responsible.

•    A COI can also establish whether a contractor has insurance coverage for accidents and damages through liability and property coverage.

•    A COI confirms that the contractor or business carried an insurance policy as of the date the certificate was issued. Many businesses reserve job bids until COI verification.

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