Starting any contracting job requires lots of planning and preparation. You’ve got to make sure that everything is in order, from having the right materials and tools to making sure you’ve got a clear idea of what work needs to be done. This type of careful planning helps prevent costly delays or mistakes that can derail the entire project. But even while all this planning goes into a project, there are still some parts of a construction job that many contractors go into without a plan, especially when it comes to insurance.
It’s not always top of mind, but insurance plays a big role in successful contracting work. When you have contractor insurance properly set up, you can easily avoid issues down the road. One of the most important insurance considerations is making sure you have a certificate of insurance. If you’ve never heard of a certificate of insurance for contractors or don’t know if you’ve got what you need, don’t worry. This guide will explain everything you need to know about a contractor certificate of insurance, setting up you and your team for many successful contracting jobs to come.
What Is A Certificate Of Insurance For Contractors?
A certificate of insurance for contractors is a document that displays your contracting company’s insurance info (or your own info if you work as a sole proprietor) and is an official way to prove your coverage. The certificate isn’t the policy itself, but it has all the useful information that can help you as you go about your daily work. Think of it like a proof of insurance, like you’d have in your car for an auto insurance policy.
This certificate can be used to show customers your insurance info, helping you prove your qualifications and give peace of mind that if something wrong were to happen as you were working, you have the coverage and protection that it takes to handle it.
What Information Is Included On A Contractor’s Certificate Of Insurance?
A contractor certificate of insurance will include important information about your business and its insurance policies. This often includes your business name, the name of your insurance company, the types of policies that you have and for how much you are covered, when those policies expire, and the name of the person or business that requested the certificate. This info can help give all the necessary insight into your coverages.
Does My Contracting Business Need A Certificate Of Insurance?
While not every contracting job will require you to provide a certificate of insurance, there are plenty of situations where it may be necessary. Not every homeowner will demand to see your certificate before letting you start work, but many commercial clients and general contractors require proof of insurance before hiring your firm.
Pennsylvania also has insurance requirements for certain contractors. Under the Home Improvement Consumer Protection Act, home improvement contractors who are required to register must provide proof of liability insurance with at least $50,000 in personal injury coverage and $50,000 in property damage coverage, or qualifying self-insurance documentation. The registration process generally requires a valid certificate of insurance when submitting commercial general liability coverage.
On top of this, depending on where your business is located, certain licensing boards may require proof of insurance through a certificate of insurance for your firm to acquire or keep a license. If you are working in a place where a contracting license is required, it’s very important to know if a certificate of insurance for contractors is required to stay licensed.
What Happens If I Don’t Have A Certificate Of Insurance For Contracting?
While the certificate is important in itself to prove your contracting business has the necessary coverage, the real risk comes with not being covered. Not having contractor insurance means that if you or your team accidentally damage a customer’s property while you are working, you could be responsible for paying for the damages out of your own pocket. Additionally, without proper coverage, you could also be on the hook if your tools or equipment get damaged or stolen on the job.
If you do have this coverage but you either don’t have the certificate to prove it or you have it but never gave it to your customer, it could deter them from wanting to work with your firm. Having the proper coverage is a necessity for many clients, and they often will simply dismiss you if you cannot prove you have what you need.
Additionally, a certificate of insurance is almost always required for someone to hire your firm as a subcontractor. If your company gets sued and you don’t have the proper coverage, the liability can fall back on the firm that hired you. To avoid this, larger contracting firms will almost always require a certificate of insurance, and not having it can mean you miss out on getting important jobs.
Let Strickler Insurance Help Your Contracting Firm Get All The Insurance Coverage And Proof You Need
Insurance doesn’t have to be something that holds your contracting firm back. Strickler Insurance works with contractors and many other trade businesses to help them be covered for anything that could happen as they accomplish their hard work. Whether you need commercial auto coverage, general liability insurance for contractors, workers’ compensation insurance, or any other type of commercial insurance policy, we can work with your business’s needs and budget to develop the coverage plan that works best for you.
Set your contracting business up to prove you have great coverage that works for you. Get a quote at Strickler Insurance today!
