Today’s world has become more concerned over lawsuits than ever before. As a result, it is extremely important to confirm that someone whom you have contracted work to carries valid liability insurance.
Regardless of your business, you will probably come across situations where proof of insurance should be requested. For example, if you are a contractor, you might hire an electrician to complete wiring for you or a plumber to install the plumbing. If you are retailer, you might hire a company to power wash your windows or to perform snow removal in your parking lot.
Why you should ask for proof of insurance:
- If a contractor causes some type of property damage while working for you and does not hold the necessary insurance coverage, you may be held legally responsible to pay for it.
- If a contractor causes bodily injury to someone else while working for you and does not have insurance, you may be on the hook again.
- Someone who carries liability insurance is likely to be more professional and responsible than someone who does not.
What you should look for:
- Ask for a certificate of insurance showing proof of liability insurance. If they have insurance, their broker should be able to easily provide this.
- Confirm that the coverage is valid by looking at the policy’s effective and expiry date.
- Confirm that the policy covers the person or business in question by checking the name on the certificate.
- Confirm that there is coverage for Commercial General Liability for a minimum limit of $2,000,000 per occurrence.
- You can also ask to be listed on their liability policy as an ‘Additional Insured’. Talk to your insurance broker for more information on when this would be appropriate.
Asking for proof of liability insurance is an important practice in ensuring your business is not financially drained through the fault of someone else. For questions on this or any other aspect of liability insurance, you can contact us at Bullfrog Insurance. We are here to help!