Certificate of Liability Insurance Cost

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One of the first questions you may be asked when you are entering into negotiations with another party is whether or not you are insured. You will often be required to present proof of insurance before signing a client contract, commercial lease, or working as a contractor. This ensures that you are covered for any accidents that may occur while performing your work, and that whoever you are working with or for will not have to cover the damages or deal with lawsuits. The easiest way to prove your coverage, and ease the concerns of your partner, is by providing a certificate of insurance. At no additional cost to you, your insurance provider can generate the certificate and send it to you or to whoever is requesting proof of your insurance.

With this guide, we will provide all the information you need to know about certificate of liability insurance cost to make an informed decision about your own policy.

We Cover in This Guide

  • How Much Does a Certificate of Liability Insurance Cost?

  • What is a Certificate of Liability Insurance?

  • What does a Certificate of Liability Insurance cover/not cover?

  • Benefits and risks

  • Tips for buying

  • Types of Insurance you may need

  • FAQ

  • Summary

How Much Does a Certificate of Liability Insurance Cost?

The document proving you have insurance is free. You can think of it as equivalent to a receipt proving you have purchased the policy. General liability insurance is typically the primary insurance most small businesses require, and often it is the most affordable. This coverage ranges from $42 to $129 per month depending on your provider, coverage, limits, industry, risks, location, revenue, number of employees, and claims history.

What is a Certificate of Liability Insurance?

A certificate of liability insurance is the document you can give to a client or vendor that provides some basic information about your policy and coverage, and, most importantly, proves that you have insurance. There are plenty of potential risks involved in every industry and on every job. If you are under a contract with another party and cause some damage, your liability insurance will cover the claim, not your partner. Additionally, your landlord may require you to provide proof of insurance before renting or leasing a storefront to ensure that your insurance will cover any customer accidents, and they will not sue the building’s owner.

What Does a Certificate of Liability Insurance Cover/Not Cover?

There are a number of risks your small business can face regularly or during a particular job. Your partner or client will want to make sure your policy protects you against the most common potential liabilities. A certificate of liability insurance indicates that you are covered against a variety of potential liabilities, including:

  • Third-party injuries

  • Third-party property damage

  • Personal injury

  • Advertising mistakes leading to damage

  • Product/completed operations

The following are some examples of risks that are not covered under most business liability policies. Typically, providers will allow you to add additional coverage to protect yourself against these scenarios.

  • Medical expenses from employee injury and illness

  • Damage to your own property, equipment, and assets

  • Business interruption

Benefits and Risks

The benefits of a comprehensive general liability policy are clear. Lawsuits can be extremely damaging to a small business. Even if you are not responsible, the amount you have to spend to defend yourself in court is considerable, in addition to eating up the time you would rather spend on your actual business. And if you lose the lawsuit and are determined to be responsible, the damages may completely wipe out your earnings. Few small businesses can survive having to pay this out of pocket. That's why insurance is essential.

Having a certificate of liability insurance easily accessible may give you an advantage over other businesses vying for the same contract. Your partner will know you are prepared and can prove that you are covered against the risks involved in your business.

Tips For Buying

Finding the right general liability insurance policy and getting the certificate of liability insurance you need can be complex. Consider the following suggestions to help understand the costs.

  • You should work with an independent agent who can help direct you toward the insurance providers with the most experience in your industry.

  • A good way to decrease your premiums is by lowering your limits and increasing your deductibles. Speak with your agent to make sure this makes sense for your particular risks and needs.

  • See what discounts your provider offers for bundling certain policies and taking certain safety measures to limit potential accidents.

Types of Insurance You May Need

  • Commercial Property Insurance: Covers damage, breakdown, and theft of business property, assets, and equipment from covered scenarios.

  • Workers’ Compensation Insurance: Pays for medical expenses, rehab, and lost wages for employees who get sick or injured while on-the-job.

  • Production Liability Insurance: Covers potential liabilities caused by the product you manufacture.

  • Errors & Omissions Insurance (E&O): Protects your business against claims from mistakes and inadequate work.

  • Employment Practices and Liability Insurance (EPLI): Provides coverage against claims of employment-related issues like discrimination, sexual harassment, wrongful termination, and failure to promote.

  • Commercial Auto Insurance: Covers liability for damage and injury from accidents when employees are driving company vehicles.

FAQ

- How do I protect my assets while we are driving to a location?

Consider inland marine insurance. It covers your own property while it is being transported from one covered location to another.

- Do I need workers’ compensation insurance?

Depending on your location, workers’ compensation insurance might be mandatory. Most states require coverage for any company that employs at least two people.

- How do I cover liabilities for employees who use their personal vehicle to drive to locations?

Purchase hired and non-owned insurance coverage. This policy covers you from third-party injury and property damage involving accidents when employees are using their own cars.

- What is a BOP?

BOP is an acronym for a business owner policy. It is an insurance package that combines essential coverage for most companies. A common example is general liability and commercial property insurance.

Summary

Having a certificate of liability insurance ready when asked is a great move for your business. It will allow you to quickly sign a contract and make sure no one else can sneak in and get the job. By understanding certificate of liability insurance cost (there isn’t one!), you can feel secure that you will be able to get a document from your insurer that meets all your needs.

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