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How To Verify Contractor has Liability Insurance?
Old 03-22-2010, 08:38 PM   #1
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How To Verify Contractor has Liability Insurance?

I'm trying to find someone to cut some trees down. One came with a Xerox copy of a Certificate Of Liability Insurance. It has the contractor's name and the name/phone number of an insurance agency. I called the insurance agency and they verified that the contractor is a client of theirs. I thought I would try to get them to verify the coverage type/amounts and policy period and they basically said they could not disclose private information(which was on the Xerox copy the contractor gave me). Is this the way insurance companies handle such questions?

They asked me if my name was in the box on lower left called
"Certificate Holder". I said copy says "Proof of Insurance" in that box. They said to ask the contractor and he could ask the agency to provide a certificate w/ my name in the box.

Is this something they would charge the contractor for (which costs he would pass on to me?) I can't figure out why my name has to (does it have to?) be there or if he's insured
if I don't have that done.

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Old 03-23-2010, 05:56 AM   #2
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I have liability insurance for my small business and if asked, I provide a copy of my certificate of insurance. Others can probably confirm but I don't think it costs me to have a certificate of insurance issued to a customer but they don't need this certificate to receive a payment from my insurance, I'm the one that is covered, not the customer. If a customer wants to be an additional insured on my policy, there is a cost of $75 and I would pass this along and frankly, not sure it makes sense. I've only been asked to do this one time. The customer was a business themselves and they were more concerned that something might happen to one of their customers so wanted my insurance to be the first source of payment. Hope this helps.

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Old 03-23-2010, 07:07 AM   #3
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Dave......thanks so much for your reply. I was a bit confused by the terminology when I wrote that question yesterday. Later, just for the heck of it, I googled that term....certificate of insurance.....and came up with basically what you are telling me. Didn't know about the costs of either way tho so your response is very helpful. To me......and I still might be misunderstanding this whole thing........the issue is that the certificate of insurance might be issued, the contractor (or insurer) might cancel that insurance before the stated term is up (or the job is completed), and then there could be a problem.

The certificate, if issued with me as certificate holder, assures me that the insurance is current at least at the time of issuance of certificate to me. I do not want to be an additional insured but this is a separate matter .
Is my understanding correct?
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Old 03-23-2010, 11:27 AM   #4
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State Registrar of Contractors?- They can verify licensing, bonding and probably insurance.
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Old 03-23-2010, 11:37 AM   #5
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Seems to me your insurance agent that covers your property should be able to answer at least some of your questions.
There's no need to complicate, our time is short..
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Old 03-23-2010, 12:01 PM   #6
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Or, you could just have him drop a tree on the house and let the insurance companies determine who covers the repairs...
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Old 03-23-2010, 12:35 PM   #7
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The construction company should issue you a certificate that says you are also insured on the policy. You want to be able to do all that is necessary to get your money if there is a problem...

I was just handed one that we provided to Enterprise for our company.. so now they are covered in case one of our employees wrecks a car..

BTW, it did not cost us anything.

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