Does your Certificate of Insurance Cover You?

Service Acords
Protecting Yourself and Your Customers with Certificates of Insurance


It's spring and Nancy is ready to finally put that bathroom in her finished basement. She is so pleased when Joe, the owner of a reputable plumbing company in town, arrives to start the work. Nancy chats with Joe, gives a cursory look at the Certificate of Insurance (COI) he provides and work begins. All is well until...slip, boom, bang...Joe loses a fight with the new sink going down the basement stairs. Joe sustains some minor injuries that come with some major hospital bills. He has never been so thankful that his injuries are covered. Or are they?


In service industries it is common practice for vendors to provide a Certificate of Insurance to customers. This assures customers of the proper insurance coverage to protect them from liability in case of an accident involving a service provider at their home or place of business. These COIs disclose liability limits, lines of coverage, and effective dates of the policies.


However, typically Acord 25 (2010), has an additional feature that denotes specific coverage of proprietors, partners, or officers that are individually included or excluded from Workers Compensation coverage. Often the owner is excluded unless they specifically choose to be included. Many small businesses also waive Worker's Compensation coverage due to the cost.


These exclusions can lead to a dangerous scenario for both Joe and Nancy. If Joe is an owner and also a service provider that is excluded from coverage, he may be at the mercy of whatever coverage Nancy can provide, unless his personal health insurance covers work-related injuries. Similarly, Nancy could then be liable for the injury of the excluded party, despite being provided with a Certificate of Insurance prior to service.


Fixing this potential exposure is as simple as businesses making sure that every employee that steps foot into a customer's house is covered and homeowners making sure to carefully check the Certificates of Insurance provided by vendors.


As always, if you would like help reviewing your Certificates of Insurance or the coverage they represent, our skilled agents at Compass Insurance Partners are happy to help.

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