Understanding Insurance Certificates in Facilities Management

There are many different aspects to facility management and being able to manage all of the moving parts is a key to success in the industry. When operations don’t go as planned, it is important to have insurance to protect you and your employees from financial burdens and legal battles. In fact, insurance certificates are most often required by federal, state or local laws. Understanding the different types of insurance certificates and what they mean for you and your facility is key to mastering this aspect of the facility management role.

An insurance certificate is simply the paper proof that the company and facility are insured. However, having your company’s name on the insurance certificate as an additional insured does not mean that your company is covered for every type of scenario. Often, there are situations where additional paperwork is necessary to gain additional coverage. It’s crucial to read and understand the requirements that accompany insurance claims so you don’t find yourself uninsured in a time of need.

The concept of endorsements or riders is also important to understand. An insurance endorsement is an amendment to an insurance contract that alters the scope of the policy. In most cases, an endorsement is used to incorporate additional coverage, but it can also exclude or eliminate aspects of an original insurance policy as well. For a facility manager or contractor, there are two types of endorsements you want to be aware of for ensuring your company is verified as an additional insured entity. One endorsement covers when a tenant or contractor is actively working in a building and another covers when the contractor has left the building. Having both of these endorsements is important to make sure you are appropriately insured. If you have any questions regarding your coverage, talk to your insurance agent right away.

Finally, understand the certificate’s liability limits. You’ll want to see the dollar amount you are covered for on the contract. If an issue occurs that costs more than the upper limits of the insurance certificate’s liability, you could be caught paying the rest. Having this knowledge can help you avoid costly issues down the road.

Paying close attention to insurance certificates is important in the facility maintenance field. These tips will make sure you’re properly covered.