What is a Workers’ Compensation Certificate of Insurance?

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The workers’ compensation certificate of insurance is a proof document that a company or business has workers’ compensation coverage. It is referred to in other terms as a proof of insurance, subcontractor certificate of insurance, certificate of insurance form, or simply insurance certificate. 

Workers’ compensation insurance is a must-have for small businesses. It provides double protection for your employees and business against any work-related potential risk. There are several components of workers’ compensation insurance; however, the most important component is the certificate of insurance.

What’s a Workers’ Compensation Certificate of Insurance

As indicated earlier, a workers’ compensation certificate of insurance is an official document used to prove workers’ compensation insurance coverage. The certificate of insurance is provided by the insurance provider and should be securely kept. 

Some of the crucial details in the certificates include the policyholder, name of the insurer, policy number, type of insurance provided, policy details, and effective dates of the coverage. The certificate of insurance is referred back by the parties involved to confirm the insurance details.

Who Needs Worker’s Compensation Certificate of Insurance?

Small businesses may, however, think that they don’t need the workers’ compensation certificate of insurance, maybe because of the low risks involved in their business or because they have fewer employees. But the fact is that every small business should have a workers’ compensation certificate of insurance irrespective of its size. 

This is because the lack of the same can lead the business to face several fines and penalties or even imprisonment according to the regulations and state laws. If you are an independent contractor or a subcontractor, you may or may not be required to have a workers’ compensation certificate of insurance for your employees or yourself, depending on your state laws. 

But to verify this, it is advisable to contact your state workers’ compensation office to know how the prevailing laws can impact your business. It is also important to note that even if you may not be obliged to the workers’ compensation policy, the businesses or companies that you do business with, such as clients or suppliers, may require you to have the workers’ compensation certificate of insurance. 

More often, general contractors who deal with very skilled workers need workers’ compensation insurance. Also, if you are an independent contractor or subcontractor working with governmental entities, you must have a certificate of insurance.

How to Obtain the Certificate of Insurance?

You will first need to have the workers’ compensation insurance policy to get the workers’ compensation certificate of insurance. You can even get coverage from self-insurance or private insurance via a state-funded system since the type of insurance you obtain depends on the laws of your state. It is easier to get proof of workers’ compensation insurance from the insurer once you have the workers’ insurance policy.

Summary

The workers’ compensation certificate of insurance is a proof document that a company or business has workers’ compensation coverage. It is referred to in other terms as a proof of insurance, subcontractor certificate of insurance, certificate of insurance form, or simply insurance certificate. 

All small businesses need to have the workers’ compensation certificate of insurance, no matter the number of possible risks involved in your business or the size of employees. Independent contractors and subcontractors may need the certificate depending on the state laws or other entities they do business with, such as the suppliers or customers. 

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