It doesn’t matter if you are in the engineering industry or you are running a small freelance business, business insurance is going to be an integral part of any protection plan. This is especially true for those businesses that are providing professional services or giving advice. That being said, E&O insurance or professional liability insurance is just like every other type of policy out there. It is confusing with tons of moving parts. In fact, you almost need to be an insurance expert just to understand how the policy covers your business and what it can protect you from.
Don’t worry because you are not alone. You are not the only one that feels this way and to fully understand errors and omissions insurance, you need to make sense of your Certificate of Liability.
There are many reasons why customers prefer working with an insured professional. One of the reasons being for their own protection in the event you cause them a loss, they want an insurance policy they can go after to recover. They are many other reasons why customers prefer working with insured professionals, you can learn more by going to this link.
What Is A Certificate Of Liability?
A Certificate of Liability insurance is basically nothing more than legal proof that you and your business are, in fact, covered by E&O insurance. This will be a document provided by the insurance company that shows you are currently covered under this policy. However, this should by no means be confused with your policy. Your policy is a legal document that you will usually keep at the office. A Certificate of Liability is morel like a card or proof that you will carry around in your wallet.
That being said, do not confuse this document with an insurance card because they are different. Your Certificate of Liability card will actually provide you with a concise rundown of your current E&O coverage. When dealing with different providers across Canada, you might find that these cards vary in appearance, but for the most part, they all contain similar information. Some of the information found on these cards can include the following.
General Information – Located on the top of the certificate, you will probably see some kind of identification labeling your business as well as the insurer. In addition to this, this section can include everything from your business information to your contact information.
Coverage Information – The main section or the body of the certificate will be your coverage information. This section is simply just going to outline the type of coverage that your business currently has. This could include your policy limits, deductibles, policy numbers, and effective policy dates.
Your Business Description – You might even be surprised to learn that your Certificate of Liability can also list the type of industry that you are in. This section is important because it legally and clearly outlines your businesses liabilities. For instance, architects are covered under E&O policies for designing buildings. Not for providing legal advice. A lawyer’s certificate might look completely different than that of an architect.
Why You Should Always Carry Your Certificate Of Liability Insurance Card
To most business owners, insurance policies sometimes seem like a lot of trouble and a bigger waste of money. This is why some business owners will not even opt for premium coverage. This is not only a major mistake, but it could be a potential downfall for your company. Always maintaining proof along with the right amounts of insurance can come in more than handy in certain situations. It will not only protect you when your business is at risk, but it could be a key marketing tool.
Securing Jobs – Most homeowners or business owners in Ontario simply don’t want to do business with uninsured companies. And, this really makes sense. There is just too much risk. If something goes awry or financial losses are incorporated there will be no way for the client to seek legal reprimands. This is why you will probably encounter certain clients that ask for proof of insurance before even considering hiring your company. Having your certificate handy will not only provide indistinguishable proof, but it will show that you are professional and ready for any situation.
Offering Peace Of Mind – Some industries have to rely on third-party subcontractors. There is just no way around this and there are always risks when doing business this way. Hiring a subcontractor is like bringing in a whole new crew to a job. This opens up both you and the homeowner to a whole new realm of potential risks. Having your errors and omissions card handy at all times will ensure your customers that the subcontractors are covered under your current policy.
Obtaining A Certificate Of Liability Insurance Card
As you can see, there are tons of benefits to be had from carrying around a Certificate of Liability insurance card. That being said, there are also tons of potential risks when you don’t carry one around. There are even more risks when you don’t have an E&O policy at all. The very best way to obtain a Certificate of Liability card is by contacting your current insurance provider if you are currently insured.
If you are not currently insured this means that you will have to seek out a provider and enroll in an errors and omissions policy. Once you have obtained the policy, you can simply request a copy of the certificate and the insurance provider will provide the information that you are seeking.
Other frequently asked questions before buying an E&O Insurance Policy
- What does an errors and omissions insurance policy cover?
- Does my business require errors and omissions insurance coverage?
- What does errors and omissions insurance cost?
- How can I lower my E&O insurance cost?
- How does E&O insurance for independent contractors I work with work?
- What does an E&O Insurance policy not cover?
- Why do some of my clients require that I have an E&O insurance policy in place prior to working with me?
- What if I want to cancel my E&O insurance coverage?–