Somebody Asked You for a Certificate of Insurance. Here's What They Want

What a certificate actually is

A certificate of insurance is a one-page snapshot: who you are, which carriers insure you, which policies you carry, what the limits are, and when it all expires. Your agent issues it.

The important thing to understand is that a certificate is proof, not coverage. It doesn't add anything to your policy, it doesn't extend anything, and it doesn't change what would be covered on a claim. It just states what's already there. If somebody needs an actual change — being named as an additional insured, for instance — that's a change to the policy, not to the certificate.

What they're usually checking for

• General liability, and whether your limits meet whatever number is in their contract.
• Workers' compensation, if you have employees on the job.
• Commercial auto, if your trucks will be on their property.
• Additional insured status — they want their company named on your policy for that job.
• Waiver of subrogation — a contract term that affects whether your carrier could pursue them later.
• Expiration dates that cover the whole length of the job, not just the start of it.

The last three are where jobs actually get held up. Additional insured status and waivers of subrogation may require specific endorsements on your policy, and those aren't automatic. Send us the contract language rather than retyping what you think it says — the exact wording matters.

The Arkansas licensing side

Separate from what a general contractor wants, Arkansas has its own requirements through the Contractors Licensing Board. Under the residential licensing law, the Residential Contractors Committee requires proof of current workers' compensation coverage before issuing or renewing a license for a contractor who is required to carry it in the first place. There's also a carve-out: unless some other law applies, a licensed home improvement contractor generally isn't required to secure workers' compensation or show proof of it when the cost of the work in Arkansas — labor and materials together — is under $50,000.

Those two sentences do a lot of work, and which one describes you depends on your license type, your employees, and the size of the job. If a license is on the line, read the statute or call the Board rather than taking our word for it.

There's also a piece that trips up one-man operations. A sole proprietor, a partner, an LLC member, or a corporate officer can buy a workers' compensation policy and exclude themselves from coverage under it — but that exclusion has to be signed, dated, and submitted to the insurance company at the inception of the policy. And if a business isn't insured, each owner has to hold a Certificate of Non-Coverage.

Note that a Certificate of Non-Coverage is a completely different document from a certificate of insurance, even though everybody calls both of them "the certificate." If somebody asks you for a certificate, find out which one they mean before you send anything.

Licensing rules and thresholds change, and the requirements differ between residential and commercial work. Check the Arkansas Contractors Licensing Board rules or call them directly for your situation — we can tell you about your insurance, but we can't tell you what your license requires.

The stuff that quietly matters more than the certificate

While you have us on the phone about paperwork, these are the gaps we see most often on small Central Arkansas outfits:

• Tools and equipment. A personal auto or homeowners policy generally isn't built to cover business tools stolen out of a work truck overnight in Argenta.
• The truck itself. If it's titled personally but used for the business, that's a conversation worth having before a claim, not after.
• Subcontractors. If you hire out part of a job, whether they carry their own coverage can come back on you. Collect their certificates the same way the general collects yours.
• Employees vs. helpers. Somebody you pay to help on a job may be considered an employee for workers' compensation purposes regardless of what you both call it.
• Your limits versus your biggest contract. If you've grown into larger jobs, the limits you bought when you were doing driveways may not fit anymore.

How to make this fast next time

1. Send us the requesting party's exact name and address as they want it to appear.
2. Forward the insurance requirements section of the contract, not a summary of it.
3. Tell us the job address and how long the work runs.
4. Say whether they've asked for additional insured status or a waiver of subrogation.
5. Let us know before you sign, not after — a contract can require coverage you don't currently carry.

With that in hand, a straightforward certificate usually doesn't take long. It's the ones that need an endorsement added that take time, and that's exactly why calling before Friday afternoon helps.

When to call us

Call us when you're bidding work that's bigger than what you normally do, when you're about to sign a contract with insurance requirements in it, when you take on your first employee, or when somebody hands you a form and you're not sure what they're asking for. That's a normal call for us and it doesn't cost you anything.