Certificates of insurance and additional insured requests for lawn care

Sooner or later a property manager emails you a page of insurance requirements and says they can't put you on the schedule until they get a certificate. For a lot of lawn care owners, that's the first time they read their own policy. It helps to know what's being asked, what it costs and where the traps are before you send anything.

What a certificate is, and what it isn't

A certificate of insurance (COI) summarizes your policies on one page. Insureon notes that ACORD, a nonprofit insurance organization, publishes the form used by most insurers, agents and brokers, usually called the ACORD 25. It lists your insurers, policy numbers, effective and expiration dates, limits for each policy, the certificate holder (your client) and a space describing operations, where additional insured status is often noted.

The part people miss is that a certificate is only proof. Insureon puts it directly: a certificate is only a summary of existing insurance coverage, and handing it to a customer doesn't give that customer any coverage. If the client wants to be covered under your policy, it takes an additional insured endorsement.

Two rules follow from that:

• Never edit a certificate yourself, even to fix a typo in the client's name. Ask your agent or insurer to reissue it.
• Don't let a certificate say something the policy doesn't. If the contract wants a waiver of subrogation and your policy doesn't have one, a line typed into the description box won't create it.

Counterfeit certificates do turn up; Insureon calls them rare, and its advice to anyone receiving a doubtful one is to request it directly from the insurance agent or broker if anything seems off. Expect some clients to do exactly that.

How to get one

Ask your insurer or agent. The certificate itself generally doesn't cost anything. The Hartford says there's no cost to get a certificate of insurance and that its policyholders can usually request one online and get it instantly. NEXT says its customers can access a certificate right after purchase and use self-service tools to add an additional insured.

Send your agent three things with every request:

1. The client's exact legal name and mailing address (the HOA's legal name, not "Oak Ridge").
2. The insurance section of the contract, word for word.
3. The date you need it by, with a few days of slack.

The requests you'll see, in plain English

Additional insured

Being an additional insured means your policy can defend and pay for certain claims made against the client because of your work. Insureon explains that when a third party sues your additional insured, your policy can address the claim so defense and court costs don't come out of the additional insured's pocket. Their protection is narrower than yours, and the details depend on the endorsement.

In lawn care terms: a resident trips over your hose in a common area and sues both the HOA and you. As an additional insured, the HOA can look to your policy for its defense.

If you work for many HOAs or property managers, ask for a blanket additional insured endorsement. Insureon describes a blanket endorsement as one that automatically includes the covered parties without having to individually name each one, and notes it would likely require a written contract or signed agreement to apply. That last point matters: if your only agreement with a property manager is a handshake, a blanket endorsement may not reach them.

Waiver of subrogation

When your insurer pays a claim, it normally gets the right to go after whoever caused the loss. That's subrogation. Insureon defines a waiver of subrogation as a provision that limits an insurer's right to sue a third party responsible for a claim after it has reimbursed the policyholder.

Insureon notes waivers can be added to client contracts and show up as endorsements on policies such as commercial auto. For a lawn care business, expect the request on workers' comp and general liability. Example: your crew member slips on a cracked sidewalk at a commercial site and your workers' comp pays his claim. Without a waiver, your insurer could try to recover from the property owner. With one, it can't. Your insurer is giving something up, so ask whether the endorsement carries a charge.

Primary and noncontributory

This wording decides the order in which policies pay. "Primary" means your policy responds first for claims arising from your work. "Noncontributory" means your insurer won't ask the client's own insurer to chip in. Put together: if your work causes a covered claim, your policy carries it, and the client's insurance stays out of it. Clients like it because it protects their loss history. Your policy has to be endorsed to say it; a certificate that claims it without the endorsement is making a promise the policy doesn't keep.

Limits and specific policies

Expect a request for general liability of $1 million per occurrence and $2 million aggregate. That's the limit 94% of landscaping businesses buying general liability through Insureon choose. When a client wants more, an umbrella is the usual answer; Insureon's example is a client requiring $3 million, met with $2 million in general liability plus a $1 million umbrella.

Many contracts also ask for commercial auto and workers' comp on the certificate. If you're not required to carry workers' comp, you may need proof of that instead. In New York, city and state agencies must confirm workers' comp coverage before issuing permits, licenses or contracts, and businesses exempt from coverage use a Certificate of Attestation of Exemption (CE-200).

Notice of cancellation

Some contracts ask for 30 days' notice to the client if your policy is canceled. The ACORD form has a cancellation section, but it can't create a notice obligation your policy doesn't have. If the contract requires notice, ask your agent whether an endorsement is needed to provide it.

What these requests cost

The certificate is free. The endorsements behind it may not be. Insureon lists additional insured endorsements among the factors that affect the price of lawn care general liability. For one or two clients the cost is usually small. For a route full of HOA contracts with waivers and primary wording, a blanket endorsement package is usually cheaper and less work than adding clients one at a time. Ask your agent to quote both ways.

Price the insurance section into the bid. A contract that wants $3 million in limits, a waiver and primary and noncontributory wording is asking for real coverage that costs real money.

Collecting certificates from your own subcontractors

The paperwork runs both ways. If you sub out tree work, irrigation repair or plow routes, get a certificate from each sub before they start. The Hartford's workers' comp audit checklist asks for certificates of insurance for each subcontractor, and underreporting subcontractors is one of the audit problems it warns about. Insureon suggests checking that the name matches, the policy won't expire before the work is done, the coverage types are right, and the limits meet your requirements.

A simple system

• Keep a folder per client with the contract's insurance section and every certificate you've sent.
• Set a reminder two weeks before each policy renewal. New policy periods mean new certificates, and a property manager may pull you off the schedule the day yours expires.
• Keep your equipment and auto information current too, because some commercial contracts ask for the vehicles you'll use on site.

For what each underlying policy covers, see the coverage page. For the legal requirements that sit behind many of these requests, see the requirements page.