Garagekeepers Coverage

Garagekeepers Coverage Helps Cover Liability to Cars Left in Possession of a Business

Garage Liability Insurance Coverage and Garagekeepers Coverage are two confusing types of insurance policies. If you as a business owner feel overwhelmed when trying to determine which is best for your business, you are not alone. These coverages are difficult to understand not only for most business owners looking to purchase the coverage, but also for many agents and customer service representatives who are looking to service and sell the policies. The main difference between garage liability and garagekeepers coverage is the difference between Liability Insurance and Physical Damage Insurance. Garage Liability Insurance covers the insured’s liability for operations and Garagekeepers Coverage covers damage to a customer’s vehicle. All businesses with garage risks need both coverages to properly insure their business. In this article we are going to examine the specifics of Garagekeepers Coverage.

Car Mechanic working under the hood.

What Exactly is Garagekeepers Coverage

According to the International Risk Management Institute, Garagekeepers coverage is, “Coverage provided under a garage policy for auto and trailer dealers, particularly those dealers that maintain a service department or body shop, for liability exposures with respect to damage to a customer’s auto or auto equipment that has been left in the dealer’s care for service or repair”.  In layman’s terms this type of insurance is similar to a form of bailee liability where the purpose of the policy is to protect the client’s car, truck, or motorcycle while it is in the possession of the business. Policies differ from carrier to carrier, but a normal policy covers damages related to fire, theft, vandalism, or collision.

Car mechanis working on the frame of a car near a wheel.

3 Parts of Garagekeepers Coverage

There are three main parts to this coverage that a business owner should speak with their agent about when adding this policy to their Business Owner’s Package. Those three parts are legal liability, direct primary, and direct excess. Legal Liability covers mechanic’s negligence. If damage is cause to a vehicle while in possession of the business, your business is covered. Two prime examples of this type of liability are when a mechanic damages a car while working on it or driving the car around the property. The other time this liability arises is when an employee forgets to lock the vehicle overnight and there is theft or vandalism as a result. Direct Primary means the client’s vehicle is protected regardless of whether the damage is due to negligence, theft not attributed to negligence, or damage due to extreme weather. Direct Excess is a type of coverage that is similar to “direct primary” coverage, but the difference is Direct Excess is paid only in excess of any amount collectible if the insured is not held legally liable. Like Direct Primary, Direct Excess protects a client’s vehicle regardless of fault.

Car Racing Mechanics preparing for a race.

Common Exclusions to Garagekeepers Coverage

Some common exclusions to a traditional Garagekeepers Coverage include: damage or theft of stereo equipment, loss of CD’s left in the backseat of a vehicle, loss of cellphones, scanners, or mobile radios, loss or damage to radar detection devices, defective parts installed on a vehicle, and even faulty work done by a mechanic.

Swimming Pool Maintenance

A Swimming Pool Maintenance Company has unique risks only the right insurance can take care of

A Swimming Pool Maintenance Companies are fairly unique businesses that exist within a specific niche. Because of the specialization of this niche, there are unique risks that only small businesses within this industry face. Businesses within this industry help clients maintain a cleanly and healthy pool environment during the warmer months of the year. The local lifeguard might be able to put chemicals in the water on a regular basis, but service technicians are trained professionals who can fix problems that exist among all types of swimming pool facilities. This expertise brings about a tremendous amount of risk that a business needs to be protected from. Here are ten types of insurance all Swimming Pool Maintenance Companies should consider.

Outdoor Pool near a beach setting displaying the need for a Swimming Pool Maintenance Company.

General Liability Insurance

General Liability Insurance is designed to cover basic property damage and bodily injury claims that your business may be liable for to third parties. It provides broad liability coverage for both personal injuries and property damage that occurs as a result of the actions of your business. Some common claims include advertising errors, libel, slander, defamation, as well as common slips, trips, and falls caused by your employees. It is important to remember that general liability insurance is not all encompassing. There are exclusions included in all general liability policies and there are additional coverages needed by nearly all swimming pool maintenance companies.

Workers Compensation

For purposes of Workers Compensation, a Swimming Pool Maintenance Company is given NCCI Class Code 9014. In most states, workers compensation is required by law for most businesses who have employees. There are some states who have exclusions based upon the size and structure of your business. even if your business is allowed to not carry coverage, it is not a wise decision to go without coverage if you have employees. Workers Compensation Insurance provides medical benefits and some lost wages to employees when they are hurt on the job. A business benefits from not being able to be sued for most employee injuries that occur as a part of normal business operations.

Lap Swimming Pool

Commercial Property

No matter if your business owns or rents a property, you need to secure some form of commercial property insurance in order to protect your business from property damage. Commercial property insurance protects your businesses physical assets from risks including fire, explosions, bursting pipes, hail storms, tornadoes, theft, and even vandalism. Natural disasters including hurricanes, earthquakes, and floods commonly are not covered by this coverage. These perils are typically not covered unless added to the policy. Commercial property insurance also covers most things inside your property including:  computers, furniture, equipment, exterior signs, fencing, landscaping, important documents, and inventory.

Commercial Auto Insurance

A Commercial Auto Insurance Policy is needed for a swimming pool maintenance company if they have any employees who operate a motor vehicle while on the job. Some form of commercial auto insurance policy is needed by a business regardless of whether the vehicles are owned or leased by the business. If the automobiles are owned, a traditional commercial auto policy will suffice. If a business has employees who use their personal vehicles, the business needs to secure a Hired and Non-Owned Auto Insurance Policy. This type of policy will also need to be secured if a business has employees who operate rented vehicles while on the job.

Inland Marine Coverage

Inland Marine Insurance is designed for equipment that is frequently in transit or stored at a third party location. If a business uses a trailor to transport equipment to a clients location, the trailor and all of the equipment loaded on the trailor are not covered by the businesses commercial auto insurance policy. This is why an inland marine insurance is necessary. This policy is best to be added to a suite of policies in order to avoid gaps in coverage.

Indoor swimming facilities need the specialization of a Swimming Pool Maintenance Company.

Cyber Insurance

If a swimming pool maintenance business accepts credit and debit cards as a form of payment, it needs to consider some form of cyber insurance. This is especially true if any of the information is stored for any period of time. Data Breaches are becoming more prevalent and small businesses are a prime target as most enterprise level businesses have put in place adequate cyber security measures. Cyber Insurance is almost always sold in a package of two policies. One deals with the first party damages to the business and the other deals with the third party liability a business faces to third parties damage as a result of a data breach.

Business Income and Extra Expense

Business Income and Extra Expense Coverage helps cover the cost of lost income a business experiences when it has to be closed for a period of time after a covered loss. The key to the policy is that the underlying claim has to be a covered loss. If a business is closed due to an earthquake and the proper insurance was not in place, this coverage will not be activated. This coverage can be used if the business is entirely closed or the normal business operations are interrupted.  In many instances, this coverage is the difference between a business being closed for a short time period and never opening the doors of the business again.

Surety Bond

A Surety Bond is an agreement between three parties, The three parties involved include the swimming pool maintenance company, the client, and the insurance company. The agreement insures the insurance company will pay your client an agreed upon amount if the business cannot deliver up to the standards of the contract. Many times a bond is required as part of a contractual agreement. The difference between a bond and a insurance policy is that the business is required to pay the insurance company back instead of just a deductible. Not all businesses are eligible for a bond depending upon the insurance carrier they are partnering with. Carriers prefer to offer bonds to established companies with a clean claims history.

Lifeguard Ring left out for the Swimming Pool Maintenance Company to clean up.

Umbrella Insurance

An Umbrella Insurance Policy is a cost effective way to ad to the limits of any existing policies. the way an umbrella policy works is that it will kick in only when the limits of another covered loss have been met. Take for example is a commercial property insurance policy has a limit of $500,000 on a property that is worth $400,000. There are additional cost associated with cleanup and removal of all debris. Also, there may be new ordinance or laws that are required int he state, county, or city that were not existent when the property was previously built. In order to bring the new building up to code, the cost of the new property may exceed the $500,000 of the commercial property insurance policy. In this case an Umbrella Policy would kick in to cover the additional costs up to the limits of the Umbrella Policy.

Business Owner’s Package (BOP)

A BOP is a suite of insurance policies designed for a specific industry and they are created to save a business money while preventing any gaps in coverage. Insurance carriers have decades worth of claims data to determine what types of claims certain businesses within certain industries are likely to face. Because of this information, carriers design a recommend package of policies for businesses within a particular industry and a specific classification code. Partnering with an independent insurance agent is a great way to determine which package of products is best for your business.

Chimney Cleaning

Chimney Cleaning is part of NCCI Classification Code 9014

The Chimney Cleaning Industry for purposes of workers compensation is given NCCI Classification Code 9014. This industry has many unique exposures unique to just this industry. Some common types of claims for businesses in the chimney cleaning industry include: client property damage, damage to your specialized equipment while out on a job, an employee causing a car accident while on the job, and stolen supplies or equipment. Because of these risks it is important to get an insurance package that is right for each individual business. Here are five insurance policies all chimney cleaning businesses should consider in order to protect the business properly.

Old Home with a Large Chimney.

General Liability Insurance

General Liability Insurance will cover a business for normal insurance claims that arise from the business of cleaning, repairing, and installing chimneys. This type of insurance will cover a business in the event an employee damages a client’s roof, chimney, or other property. It will also cover the cost of a lawsuit that arises up to the limits of the policy. These legal costs can be incurred because of a third party lawsuit related to property damage, bodily injuries, and even advertising injuries. The important part to remember in relation to general liability insurance is that it is not all encompassing. There are additional policies nearly all chimney cleaning companies need to secure.

Black and White Photo of a man cleaning a chimney. Commercial Property

Commercial Property Insurance is needed by a chimney cleaning business only if they operate a physical location. This includes a facility a business rents and it may impact the business owner’s homeowner’s policy if the business operates out of the owners house. Common claims related to commercial property insurance include fire, theft and natural disaster.

Commercial Auto Insurance

Commercial Auto Insurance for a chimney cleaning business is needed by any business who has an employee drive a car as part of their work. This is the case whether the employee is driving a car the business owns, a rented vehicle, their personal car, or even if the owner is driving their personal vehicle for work. If the business owns the vehicle being used for work, a traditional commercial auto insurance policy is the correct policy. If the business has employees who drive their personal vehicle or a rented vehicle, the business will need to include an additional hired and non owned auto insurance policy. This will cover the liability the business faces to third parties for accidents that occur because of the actions of the employee while on the clock.

Laborer who works for a Chimney Cleaning Company. Umbrella

An Umbrella Insurance Policy is a affordable way to add to the limits of other existing policies. An Umbrella Policy kicks in only when the limits of the underlying policy are met and it only kicks in on loss that are covered by another underlying policy. If the claim is not covered, an umbrella policy will not kick in in place of the missing policy.

BOP Insurance

A Business Owner’s Policy allows a business to bundle all policies together in to one package. This is beneficial to the business for two main reasons. First, it prevents any gaps in coverage from occurring. A gap in coverage is when a claim occurs where two policies associated with the claim have exclusions related to the particular claim in question. When a business bundles all policies together in a BOP is beneficial to a business is because carriers are more likely to dig deep for additional credits and discounts when they know a business is purchasing multiple coverages. These two benefits make sure a business gets comprehensive coverage at rock bottom rates.

 

Workplace Injuries Spike In Spring

Especially Following the Spring Switch to Daylight Saving Time

Spring Dandelion Bloom

Severe Spring Weather

There are risks associated with the weather during all months of the year, but extreme weather is especially problematic in the Spring months. Depending upon where your business is located, there can be snow, rain, sleet, hail, thunderstorms, or even tornadoes. If you have employees who work out in the elements, you need to have crystal clear procedures for how they should proceed during certain weather related scenarios.

Insects and Vegetation

There are many types of insects and vegetation that are just springing to life during the Spring Months. Many of the critters coming to life carry a number of diseases. In addition to insects and rodents, there are also plants like poison ivy that can cause a number of rashes. Because of these issues, it is important to have all employees wear proper clothes to prevent exposure to these dangerous insects, rodents, and plants.

Sun Exposure

Sun exposure becomes more of an issue as the warm weather appears more often. If you have employees who work out in the elements, it is important to prepare them for heat stress and sunburns. It can be easy to forget about the dangers of the sun when the temperatures are more mild. Sunburns in April are just as dangerous as sunburns in July. Help your staff deal with these exposures by providing proper breaks, shade and plenty of access to water.

Dust and Allergies

Seasonal Allergies can be a debilitating problem for many people. In some instances the problem is so severe it can cause some suffers to have problems with asthma. These problems intensify in the Spring Months because of the high levels of pollen. If you have employees who work primarily indoors, improving the indoor air quality with proper ventilation, maintaining the HVAC System, and using non-toxic cleaning supplies. If you have employees working out  in the elements, it is wise to have morning toolbox talks about what elements your staff are dealing with this time of year and how they can prepare to deal with those elements.

Slips, Trips, and Falls

In many parts of the country, Spring is a time when enormous amounts of snow melt. This creates a very muddy environment for your employees. If the area of the country your business operates in deals with snow melt, it is important to prepare your staff for slippery conditions. This preparation is paramount to creating a safe work environment during the Spring Months. If your business is open to the public, there is extra liability if customers are hurt on your property. Dealing with these issues in advance should reduce the frequency and severity of insurance claims.

 

Exterminator

6 Insurance Policies an Exterminator Should Secure

An Exterminator is someone whose occupation is primarily the extermination of troublesome rodents and insects. They attempt to rid a property of multiple types of insects for both personal residents and commercial dwellings. For purposes of workers compensation insurance exterminators are classification code 9014. Because the essence of an exterminator business is keeping unhealthy critters out of people’s lives. With this business, comes an enormous amount of risk. Here are six types of insurance all exterminator businesses should consider securing.

Exterminator

General Liability

General Liability Insurance is designed to cover basic liability a business faces to outside third parties. It covers common slips, trips, and falls that occur because of the actions of your exterminator business. It is crucial to remember the policy is not all encompassing. There are several types of liability that are not covered within a general liability policy. For this reason, it is important to partner with an independent insurance agent to make sure your business covers all risks.

Workers Compensation

Workers Compensation Insurance is required by law for most businesses in most states. Some states have exceptions for businesses depending upon industry, revenue, and number of employees. Even if your business is not legally required to carry coverage, it is usually in your best interest to secure coverage. Workers Comp covers employees when they are injured for medical costs and some lost wages when they are hurt and not able to work. It covers the business in the form of not having to risk being sued when an employee is hurt within normal business operations.

Professional Liability

Professional Liability Insurance will protect an exterminator business from the expert advice and services it offers. If an exterminator overlooks termite damage or misapplies a chemical, the business may be liable to damages resulting from those mistakes. Without professional liability in place, these are damages the business is liable for if a lawsuit is brought by a third party.

Pollution Liability

Pollution Liability Insurance is offered on either a claims made or occurrence basis. This means a Claims Made Policy covers insurance claims based upon the time period the claim was filed. An Occurrence Policy covers a company based upon when the claim occurred.  Pollution Liability provides coverage for third party bodily injury, property damage, defense, cleanup, and related defense costs as a result of pollution conditions.

Commercial Auto

If an exterminator business has employees who drive from location to location as a part of their job, some form of commercial auto insurance is necessary. If the business owns the vehicles being used, a standard commercial auto policy is all that is necessary. If the business has employees who use leased vehicles or their own personal vehicles, a hired and non-owned auto insurance policy should be added to the businesses Business Owner’s Package (BOP).

Umbrella Coverage

Umbrella Insurance is a cost effective way to ad to the limits of existing policies. The key portion of this policy for business owners to remember is that an Umbrella Insurance Policy only kicks in if the underlying claim is covered. This means that if a business has property damage that is covered by an in place commercial property policy and the damages are larger than limits of the policy, the umbrella policy will cover the additional damages up to the limits of umbrella policy. For this reason, it is a good idea to have an umbrella policy added to a business owner’s package.

Pet Services

Pet Sitting, Pet Waste Removal Services, and Dog Walking Companies 

There are many types of businesses related to pet services. Pet services companies all have unique risks that need to be protected. Not all insurance packages are created equal and it is important for packages in this industry to be designed specifically for each individual business. In today’s busy world, many pet owners do not have enough time to both play with their pet and also care for the dogs many needs. Some pet owners simply don’t want to deal with grooming and waste removal. Depending upon what services your business offers, the business can create an enormous amount of liability concerns. In order to properly insure your business, it is important to take an adequate amount of time to determine exactly what type and amount of insurance your business should secure. Here are three types of companies who are included in Class Code 9014, four tips to remember when purchasing coverage, and five types of coverage businesses in this industry need to secure.

Dog running along a trail.

Pet Sitting

Pet Sitting businesses are booming in many metro areas throughout the United States. Some provide services to walk a dog during the day while a person is at work, but most specialize in offering services for when a pet owner is away on vacation. Many pet owners like the idea of leaving their dog at home in a familiar setting as opposed to a boarding house.

Pet Waster Removal Services

Pet waste removal services help customers when they need one time cleanings or ongoing periodic cleanings. Some people may want cleanings when they buy a new property that has been used by a pet owner. Most customers are regular ongoing customers who have both indoor and outdoor pets and the pet owners need periodic deep cleanings.

Dog Walking Companies

Unlike pet sitting companies, dog walking companies specialize primarily on walking a dog during the day when a pet owner is away at work. As people work more hours and metro commutes get even longer, these services are needed by more pet owners.

Pet Services Companies include companies that walk dogs during the day or when pet owners are away on vacation.

How Pet Services Companies save on Insurance?

Partner with an Independent Agent

Partnering with an Independent Agent is one of the best ways to secure insurance for your business. This is because an independent agent is not connected to any one insurance carrier. An independent agent sells the products and services of many carriers. Because of this independence, an independent agent can tell you the positives and negatives of each policy and each carrier. A captive agent sells the products of only one carrier and they are only able to tell you the positives of that one carrier. In the long run this will get your business better coverage at a lower price.

Communicate Long and Honestly With Your Agent

It is important to speak long and honestly with your independent insurance agent. No one knows your business as well as you do and because of that it is important to talk about the ins and outs of your business with your agent. It is equally important to express to them your level of comfort with risk and what you value in a relationship with your insurance agent. Remember, your agent speaks with many people from many different walks of life throughout the day.  not all of those business owners value the same things in an insurance relationship as you do. Tell them what you value and set expectations on the front end in order to prevent many headaches down the road.

Shop Around Your Policy

It is important to shop around your policy periodically. It is not a good idea to switch carriers each year based on a slight drop in price, but it is important to make sure your carrier is competitive with the marketplace. Establishing a long term relationship with your carrier is important because when you experience a year when you have a severe claim or a large number of small claims. If you have purchased insurance from a carrier multiple times, they are more likely to work with you on premium after you have a bad year claims wise. At the same time, it is important to make sure your business is getting a fair price on premium.

Create a Safety Plan

A Safety Program can have an immense amount of impact on a businesses experience modification rating. This rating is the single most impactful aspect of what a carrier looks at when they are determining what to charge a business for commercial insurance. Setting a safety program for your organization can keep the frequency and severity of claims low. This will have a positive impact on what you pay for insurance.

What Insurance should a Pet Services Company Secure?

General Liability

General Liability Insurance is required by law for most business in most states. General liability covers the basic liability a business faces to third parties who are damaged by the actions of the business. This coverage is not all encompassing and it is important to speak with your agent to determine what it does and does not cover. When having this conversation, your agent should be able to help you determine what additional coverages your business needs.

Workers Comp

Workers Compensation Insurance is also required by law by most businesses in most states across the United States. There are some exceptions in each state depending upon the industry a business operates in, the state you operate, the number of employees, and revenue of a business. Workers comp covers a business for injuries that occur to employees on the job. It is referred to as the ‘Exclusive Remedy’ because it provides wage replacement and medical expenses to injured employees while businesses get the peace of mind that they cannot be sued for injuries that occur because of normal business operations.

Lost Key Liability

Lost Key Insurance covers a business who is responsible for keeping up with the keys of another person or businesses property. This coverage will pay to replace the locks of a client if you or an employee lose their keys. One thing to remember is that this coverage is specifically for the replacing of locks, but not other losses that occur because of the lost keys. For instance, if an employee losses a key and is forced to leave a clients property unlocked over night. This coverage will not cover losses that occur if the residence is broken in to over night and possessions are stolen. Also, lost key coverage does not cover criminal activity, like if your employee intentionally takes a key or has a copy made while in possession of the key.

Animal Bailee

Animal Bailee coverage provides covers your business in the event you are held legally liable for injuries or damages sustained by an animal in your care. It also can include a business personal property extension which covers loss and destruction of your property by others’ animals under your care. The bodile injuries that can occur to the pet may occur from fire, wind, theft, escape, flood, vandalism, and attack from other animals. It is important to speak with your agent about the specifics of your particular policy. Each carrier has their own exceptions to each policy. Some common exclusions include:  any criminal or dishonest acts by you or your employees,  theft of animals left in vehicles overnight, sickness, disease or natural causes, or neglect to use all reasonable means to save and preserve the pets.

Commercial Property

Commercial Property insurance is needed if you have a facility where you care for pets, but also if you use your residence for business purposes. Many claims that could arise while doing business are not covered under a personal home owner’s policy. Therefore, it is necessary to secure a commercial property insurance policy in order to properly protect the facility you are operating.

What is a Certificate of Insurance?

When does a Business need a Certificate of Insurance?

A certificate of insurance is a document that is used to provide info about specific insurance coverages. The certificate is issued to one entity and provides information about the insurance coverages another entity has secured. The certificates are usually required as part of a contract between a business, a contractor, and a subcontractor. A certificate of insurance can be offered for General Liability, Business Auto, Umbrella, and Workers Compensation.

Certificate of Insurance

What is Included with a Certificate of Insurance?

The certificate of insurance includes the type of insurance coverage that has been secured, the limits of those policies, and the named insured.  The certificate will also include whether there is an Additional Insured or Waiver of Subrogation associated with any of the policies included in the certificate. It should include detailed information about the company or person who receives the certificate that includes full address, contact name, email address, phone number, and fax number.  When requesting a certificate be sent to another entity, the more information you provide the better.

Who Might need a Certificate of Insurance?

Typically a certificate of insurance is needed when a business hires a general contractor for a job or a contractor hires a subcontractor to perform a specific part of a job. The certificate is provided as proof the business or the general contractor made sure the contractor or subcontractor they are interacting with has coverage in place at the time the work was done. It is important to always ask a contractor for a new certificate every time you work with them. Just because someone had coverage in place in the past does not mean they still have coverage. If a business or a general contractor hires a business who does not have proper coverage in place, the business or general contractor will take on the liability for damages in most instances.

What is a Waiver of Subrogation?

Why Might a Business use a Waiver of Subrogation

The term Subrogation refers to the right of an insurer (insurance carrier) to pursue an insurance loss to the insured (the person or entity being insured) in an attempt to recover funds paid in a claim. Conventional Subrogation refers to a relationship between the insured and insurer as defined in an insurance contract. A Waiver of Subrogation is a provision in a contract where an insured waives the right of their insurance carrier to seek reimbursement or seek compensation for losses from a negligent third party. A Waiver of Subrogation is between two parties where one party agrees to waive subrogation rights against another in the event of a loss. A Waiver of Subrogation can be used on a General Liability, Auto Liability, Umbrella Liability and Workers Compensation.

Waiver of Subrogation

What does it mean to waive your rights?

A waiver of subrogation is issued when one party within an insurance claim wants to relinquish the right of subrogation for damages paid out in a claim. Most of the time a waiver of subrogation is entered into between two businesses or a business and a contractor. When it comes to the workers compensation system the claim goes entirely on the insureds insurance history and will increase the experience modification rating of that business. The waiver is most frequently entered in to in order for one entity to force the other entity to not allow the insurance company of the insured to come after the other party within the insurance claim for damages that were the fault of that business or its employees. It is usually a requirement for a contract and the waiver gives a business the peace of mind they will not be held liable for damages if they are somehow partially responsible for a loss.

How do I obtain a waiver of subrogation?

Most insurance carriers accommodate a waiver of subrogation on most insurance policies. They are most commonly agreed upon with in General Liability, Auto Liability, Umbrella Liability and Workers Compensation Insurance. When engaged in to, the waiver increases the exposure of the insurer which may lead to a higher insurance premium. Before entering into a waiver, it is important to evaluate the probability that employees being injured while on the job. Additionally, it is important to consider whether your employees may be placed in situations where they could be injured themselves offsite due to the negligence of another third party.

Examples of Waiver of Subrogation

Construction Project

When a construction project requires adding on to an existing property. The engineers, architects, and construction company may want a waiver of subrogation for damages caused by the design and construction of the existing property.

Commercial Cleaning Company

A commercial cleaning company may be required to sign a waiver of subrogation in order to enter into a contract with a corporation to clean their property after hours. An example of where this might be necessary is if a cleaning company employee is injured on the property of the corporation they are cleaning, the insurance company of the cleaning company cannot sue the corporation for damages that caused the injury to the employee.

Landlord Tenant Agreements

When a Landlord is renting out a property to a tenant, it may require a two way agreement where both parties give up subrogation rights. The waiver subrogates rights against each other in the event of some kind of loss like damage to the building or fire.

What a Certificate Holder Needs to Know?

Certificates of Insurance are not common for most people in most walks of life. Unless you work in accounting, make purchasing decisions for your company, manage promotional events, or oversee contractors; you have probably never seen a certificate of insurance. A certificate of insurance is a document used to provide information about specific insurance coverages secured by one person within a contract. The certificate verifies insurance coverage has been secured, the types of coverage secured, and the limits of those policies. Also, it will include the insurance carrier, the policy number, the named insured, and the policy effective dates. Now that you know what a certificate of insurance is, here are some tips to remember when you are a certificate holder.

Business Meeting with a certificate holder.

Who is the Certificate Holder?

Being a certificate holder means that you are given proof that insurance is in effect. One of the most common examples of a certificate holder is when a business partners with contractors on a project and it is part of the contract for the contractor to carry their own particular coverage. Here are some additional examples of the types of businesses who frequently need to have certificate holders:

  • Food Truck
  • Yoga Instructor
  • Promotional Events
  • Owner/Operator Truck Drivers
  • Lawncare/Landscaping Companies
  • Maintenance/Janitorial Services Companies

What coverage does the Certificate Holder have?

One common misconception about a certificate holder is that they are not covered under the policy mentioned in the certificate. The certificate is just verification that the other party in the transaction has the required coverage. The person, people, or business covered under the policy is provided on the certificate. It may include both the named insured and the additional insured depending upon the specifics of each policy.

Engineering Contractors need to have a certificate holder when entering into a contract.

What Other Parties are Involved with a Certificate of Insurance?

The holder of a certificate of insurance is a third party to the insurance relationship. The insurance carrier and the named insured are the two primary parties involved with the insurance coverage. An additional insured can be added if it is necessary. Partnering with an independent insurance agent is the best way to determine how to best navigate these issues.

What Types of Coverage Frequently Need a Certificate Holder

 General Liability

General Liability Insurance needs to be provided to a ceritificate holder because it is the primary coverage that protects the business or person from third party liabilities for damages. This is essential when hiring contractors, because if a business hires contractors and fails to make sure the contractor has adequate insurance, the business can be liable for damages caused by the contractor.

Business Auto

Business owners who have employees who operate a motor vehicle as part of their job need to secure proper insurance. If the business owns the vehicles being used the policy is commercial auto. If the employee is driving their personal vehicle or a vehicle rented by the business, the correct policy is hired and non owned auto. This may be needed when a business is providing transportation for a special event like a limousine driver for a wedding.

Umbrella Coverage

Umbrella Insurance Coverage is also referred to as Excess Liability Coverage. Umbrella Insurance provides additional liability coverage above the limits of other existing policies. A certificate holder may need umbrella coverage added to the certificate because the contract requires a certain level of insurance limit for the contract to be valid.

Workers Compensation & Employers’ Liability

Workers’ Compensation Insurance is often referred to as the ‘Exclusive Remedy‘. It is called the ‘Exclusive Remedy’ because the coverage provides medical expenses and some lost wages for employees who are injured on the job. Employers benefit from the peace of mind they cannot be sued for injuries to employees who are hurt because of normal business operations. A Certificate Might be requested because the state laws and regulations require contractors to carry workers comp coverage in order to engage in certain types of work or contracts. The certificate proves the certificate holder made sure the contractor was up to date on all necessary coverages.

What is an Additional Insured?

According to the Insurance and Risk Management Institute (IRMI), an Additional Insured is, ‘A person or organization not automatically included as an insured under an insurance policy who is included or added as an insured under the policy at the request of the named insured‘. Now let me try to help you understand what that means in layman’s terms. An additional insured refers to any person who is not the policyholder, but is covered by an insurance policy. This coverage may be limited to a single event (wedding), or it could last the lifetime of the policy (for a contractor who will be working for the business throughout the entire year). First you need to understand the three different entities involved in a certificate of insurance. Those three entities are the additional insured, the certificate holder, and the policy holder. Here is a brief description of each entity and when it is best to add an Additional Insured or use a Waiver of Subrogation.

Additional Insured listed on a certificate of insurance.

Entities to an Insurance Agreement

Policy Holder:

The policy holder of an insurance policy is the person or business whose name is on the policy. It is important to distinguish this person from the name insured. The named insured is the person or business the policy is purchased to cover.

Additional Insured:

An additional insured is a person or organization that is added to an insurance policy and that person or organization enjoys the benefits of being insured under the policy. This coverage is in addition to the person or organization who originally purchased the insurance policy. The additional insured is named on a certificate of insurance. They only have a certificate if you send them a copy.

Certificate Holder:

The certificate holder is the entity that is provided a certificate of insurance as evidence of the insurance maintained by another entity. In its most simple form, a certificate of insurance is proof of insurance. The certificate holder is holding the certificate of insurance proves a business made sure to check the insurance coverages of contractors they partner with.

Digital picture of a certificate.

When Should Someone Add An Additional Insured?

One of the most common examples of when it is wise to have an additional insured is if someone is a landlord of a commercial building. Landlords commonly require tennants to add the landlord under their insurance policies in order to lease the facility. Another good reason to be add is your business rents a piece of equipment from another business. You may want to add the other business as an additional insured under your insurance policies involving the equipment.