If you hire trades, vendors, or subcontractors, two terms should be part of how you do business: Additional Insured and Certificate of Insurance. They sound like paperwork, and they are, but they are also one of the simplest ways to protect your business from someone else's mistake.
Start with the Certificate of Insurance, often called a COI. It is a one-page snapshot that confirms a contractor or vendor actually has insurance, what type, how much, and for what dates. Asking for one before work begins is how you confirm the person you hired is genuinely covered, rather than taking their word for it. A policy that lapsed last month does you no good if something goes wrong today, which is why the dates on that certificate matter.
Being named as an Additional Insured goes a step further. It means the other party's insurance policy is extended to also protect you for liability arising out of their work. Here is what that does in practice. Say you hire a contractor and something they do causes injury or property damage, and a claim or lawsuit follows. If you are named as an Additional Insured on their policy, their insurer can respond on your behalf too, rather than the claim landing entirely on your own policy. It puts the financial responsibility where it belongs, with the party whose work caused the problem, and it helps protect your own claims history and premium.
This runs in both directions, and that is the part business owners often miss. If you hire subcontractors, making sure they carry their own insurance is not just smart, it is frequently a condition of your own policy. Many commercial policies expect you to use insured subcontractors and to collect certificates confirming it. If you do not, and an uninsured sub causes a loss, you can find yourself carrying a claim you assumed someone else was responsible for, and possibly out of step with your own policy terms.
None of this needs to be complicated. The habit is simple. Before a trade or vendor starts work, ask for a Certificate of Insurance, confirm the coverage and dates, and where it makes sense, ask to be named as an Additional Insured. Before you hire a sub, confirm they carry their own coverage.
If you are not sure what your own policy requires, or what to ask a contractor for, that is exactly the kind of thing I help clients sort out. A few minutes up front can save you a very expensive surprise later.
Mandy Stierman
Founder and Principal Broker
Velocity Insurance Inc.