As your commercial cleaning business expands, so probably do the requests for certificates of insurance (COI). It seems like a simple request, but sometimes it turns into lengthy discussions with clients, your insurance broker, and possibly wasted time as various versions of documents get sent back and forth. One party sends it over and the other doesn’t accept it.
What is so special about these documents?
The short answer is, not much. A certificate of insurance is simply an abbreviated representation of the insurance coverage your commercial cleaning business has in place when the certificate is created. It is not a contract or an insurance policy itself. Yet, this simple document has been the source of many long phone calls with brokers, many stalled cleaning jobs, and even payments being withheld after you successfully completed the cleaning.
But the simple certificate of insurance has a tough job, sometimes an impossible job. It is being asked to adequately relay what is probably hundreds of pages of very specific language and specific forms found in multiple insurance policies. Few people want to read insurance policies and the certificate is often coerced and burdened with trying to do the job in one or two pages. And that kind of abbreviation can cause miscommunication.
Many contract requirements ask for certain wording on certificates, brief sentences that promise coverage will respond in a certain way. The burden on certificates became so heavy that some states actually passed legislation limiting what could be put on the certificate. The states’ message was, if you really need specifics, get a copy of the policy. Certificates cannot be used as contracts.
Why is there such scrutiny over the certificate of insurance?
The issue is that certificates of insurance represent not just insurance coverage but also responsibility. Legal responsibility, financial responsibility, responsibility for employee safety, responsibility for the quality of the work done. It doesn’t say all that on the certificate but the limits shown and brief descriptions written are supposed to make all this responsibility very clear to all parties.
Your client wants to know you are taking responsibility for certain aspects of the job, such as your employees for example. And, just as importantly, you have the financial ability, through the backing of an insurance company, to pay for certain issues. In the same way, if you are using subcontractors, you want to know they have the financial ability to respond to an issue which is their responsibility.
How to handle miscommunication regarding certificates of insurance?
If you find yourself stuck in the middle regarding a certificate issue, you are already ahead of the game by understanding what certificates can and can’t do. Start with talking to your insurance advisor. They know full well the limitations of the certificate. They can provide more complete information on what you are being asked to provide via the certificate. And just as importantly, they can explain how the request may be affecting your coverage or expanding your responsibilities. They may even be willing to talk to the other party to help decipher what is being requested and if the certificate can provide what is needed.
The lowly Certificate of Insurance (COI) is an efficient tool to help represent information for a specific time. By understanding its purpose but also its limitations you will be able to utilize it more effectively as you expand your Commercial Cleaning business.
