Workers Compensation Certificate Of Insurance: What Is it?
Business insurance can be complex. There’s liability insurance, property insurance, and more. Your location, business size, and industry can affect the coverage you need and the cost. But there’s one type of insurance that’s legally required for most businesses: workers compensation. Once you get this coverage, you’ll also want to keep your workers comp certificate of insurance on hand. Keep reading to learn what this is and why it’s so important.
What is a workers comp certificate of insurance?
A workers compensation certificate of insurance (COI) serves as proof that your business carries this type of insurance. It’s similar to a general certificate of liability insurance, but it’s specific to just one of the line items on the certificate: the workers compensation policy. It includes important details about your policy, including the insurer’s name, policyholder’s name, policy number, and dates of coverage.
Sometimes abbreviated as a WC COI, it allows government agencies and clients to confirm that you have this mandatory coverage. It’s especially important because workers compensation insurance is required in every state except Texas. The specific requirements and exemptions vary from state to state, so check with your local government or a legal expert to understand the laws that apply to you.
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What is a workers comp waiver of subrogation?
A workers compensation waiver of subrogation is an endorsement on your certificate of insurance that prevents your insurance provider from seeking reimbursement from a third party that caused an employee injury. For example, if your employee is injured working at a hospital job site, your insurance provider would not be able to collect any money from the hospital.
Clients and contractors sometimes request this waiver to minimize their liability and eliminate potential legal disputes. Your insurance company may allow you to apply this endorsement to your policy, but doing so could cause your premiums to increase.
Who needs a WC certificate of insurance?
In most states, any business with at least one employee is required to carry workers compensation insurance. Because this insurance is usually mandated by law, all businesses are smart to have a workers comp certificate on hand, regardless of their size or industry. If a business owner doesn’t carry workers comp, they could face fines, penalties, and even imprisonment, depending on the state.
In addition to legal requirements, clients and other companies you do business with might ask to see your workers compensation certificate before signing a contract. Hiring an uninsured business could lead to big financial consequences for them, and they want to know you’re covered and your insurance company will pay for any potential damages.
Does the business owner need to be covered?
The law usually doesn’t require owners to cover themselves on their workers compensation policy. Not covering yourself can make your policy premium more affordable, but you won’t be compensated in the event you have a work-related illness or injury. Plus, although it’s optional, many clients will want the WC certificate of insurance to cover the owner as well as all employees.
Do self-employed owners need a workers comp certificate?
Self-employed individuals or sole proprietors might not be required by law to have workers compensation insurance. However, it can be beneficial for certain businesses and industries because your clients or partners might want you to have it. Check your state laws and client requirements to determine if you alone need a WC certificate of insurance.
Do subcontractors need a workers comp certificate?
Yes – subcontractors also need to carry workers comp insurance and have a certificate. When hiring a subcontractor, having them provide a WC certificate of insurance is essential to ensure you won’t be held liable for any injuries and keep costs low. If they’re not insured and a subcontractor’s employee is injured on the job, it could end up being your responsibility to pay the claim.
How much does workers comp insurance cost?
The cost of a workers compensation policy varies based on factors like the nature of the business, the number of employees, the state in which the business operates, and the company’s claims history. You’ll want to compare multiple quotes from different insurance providers to get a clear picture of the potential cost.
How To Get A WC Certificate Of Insurance
Your insurer should automatically send you a certificate of insurance when your policy becomes active. However, sometimes a client or contractor will request certain coverages that you don’t have. Or, maybe you lost the workers comp certificate or never received one in the first place. Here’s what to do:
- Identify Your Coverage Needs: Ask the requester what minimums and limits of coverage they require. Have their name, address, and tax identification number ready.
- Contact Your Insurance: Reach out to your insurance provider and tell them what you need. If your existing policy satisfies the minimum requirements, they’ll send you the certificate. Otherwise, purchase the necessary additional coverage.
- Receive and Share Your COI: Once you have coverage and a COI is requested, you'll receive the COI, which you can then share with the requesting party or keep for future reference.
Top Workers Compensation Carriers
To receive a WC certificate of insurance, you’ll need an active policy. When it comes to choosing a workers comp insurance provider, reliability and a strong financial background are crucial. Some of the top carriers include:
- Hartford Fire & Casualty
- Zurich Insurance
- Chubb Ltd.
- Liberty Mutual
- Berkshire Hathaway
- BCBS of Michigan
- Old Republic
- American Financial Group
- Texas Mutual Insurance
LandesBlosch has decades of experience in this industry, and we can provide quotes from the insurance carriers listed above so you have a variety of options to choose from.
The Bottom Line
A workers compensation certificate reassures clients and prospective business partners that you’re in compliance with the law and prepared to handle work-related injuries or illnesses. It’s a testament to your responsibility toward covering medical bills, lost wages, and potential employee lawsuits, and can enhance trust and business relations.
Workers comp is one of the most important types of insurance, and you’ll want to work with a broker and insurance provider with a proven track record. Contact us today and we’ll work with you to find the perfect policy and get your WC certificate of insurance in the mail.
About The Author: Alyssa Doyle
Alyssa is a Commercial Risk Advisor specializing in small business, construction, real estate, and products liability.
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