Many types of businesses or organizations have different levels of general liability insurance needs. Usually, a business will maintain basic liability coverage, as well as insurance for loss against fire, theft or other damage.
A business with employees also must comply with state workers' compensation insurance requirements.
Often, if a business or organization is leasing equipment or holding an event outside of its normal business location, it may need to provide proof of insurance coverage. This is called a certificate of insurance and it is given to the company that provides the equipment or location.
It may be if your business is going to provide service or work on their premises, you may need to provide proof of insurance. It may be a requirement to provide proof of insurance or forward a copy of your businesses certificate of insurance to even bid on a project or service for another entity.
If you find your business being requested to provide a certificate of insurance, it’s best to ask some questions before just calling your agent with a request. Ask the company requesting the certificate if there are minimum coverage limits needed. Are they looking for a particular type of coverage and for what duration?
Once you have that information, you can call your insurance provider to verify your coverage meets those requirements. If not, you will have to determine whether raising your limits and coverage warrants moving forward in the process at all. If everything is in order, move forward on the project and provide the requesting company the certificate of insurance.
You may want to have your insurance provider issue you an updated certificate of insurance with every renewal.
You may also want to discuss coverage changes and options and how easily your coverage can be amended as the jobs come and go. Just remember, as your business grows, you will have these requests to provide proof of insurance happen much more frequently.
The Minnesota Department of Commerce has a wealth of information about general liability insurance for a new start-up business, or an established business.
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