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Everything You Need To Know About A Workers’ Comp COI

Workers’ compensation insurance is required in nearly every state as a condition of licensure. While some licensed professionals may be able to operate without it, or simply self-insure, most businesses cannot. 

The good news is that obtaining workers’ comp insurance is incredibly easy and inexpensive. To get started, you’ll need to request a workers’ comp insurance certificate from your potential insurer. 

Keep reading to learn everything you should know about workers’ comp COI and how this document affects your business.

Benefits of Worker’s Compensation

Workers’ comp insurance offers protections to workers and businesses alike. Some of the most important benefits include the following: 

Fostering a Safe Work Environment

Workers’ comp increases your employees’ peace of mind, making them feel safer and more comfortable on the job. This can help reduce the risk of accidents and injuries. 

Supporting Workers With Injuries

Workers’ comp ensures they receive the necessary medical treatment if an employee sustains a work-related injury. Employers don’t have to worry about paying for these expenses or hiring other employees to cover for the injured worker. 

Covering Work-related Illnesses

Workers’ comp also provides coverage for illnesses that are contracted during the course of employment. This includes mental illnesses that might result from stress and workplace pressures.

What Is a Workers’ Comp COI?

A certificate of workers’ compensation insurance, or workers’ comp COI, is the document your insurance carrier will issue to show that you’re properly insured. This document verifies the following information: 

  • Name and address of your business 
  • The number of employees you have 
  • The maximum amount you can be paid if your business is sued  

Why Is a Workers’ Comp COI Required?

All businesses that employ workers in any capacity must carry workers’ comp insurance. 

A COI certifies that your business is properly insured for workers’ compensation coverage. If someone is injured on the job, this document verifies that his or her medical bills will be covered. It also verifies that your business can hire the number of employees you have on the books.

You risk losing your business license if you don’t carry workers’ comp insurance. Additionally, the state government requires that you furnish a copy of your COI to any person who requests it.

Can You Operate Without a COI?

While you can operate without a COI, it is not recommended. You will likely operate with less than the required coverage if you do not have a COI. You risk fines, license suspensions, and other penalties if you operate without a COI. If caught, you may be forced to stop operating until you have acquired coverage. 

You can apply for a short-term policy if you do not have the funds to purchase workers’ comp coverage. This will enable you to obtain the required coverage until you can find a company to provide you with a longer-term policy.

The Bottom Line

A workers’ comp COI is a document issued by your insurance carrier that verifies the appropriate amount of coverage and lists the number of employees on your payroll. 

You must provide a copy of your COI to your state workers’ compensation board to verify that you’re properly insured. If you operate without a COI, your business may operate illegally and expose you to fines and penalties. 

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