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Evidence of Insurance - Can You Prove It?

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In an earlier post, I explained about Certificates of Insurance – when they’re needed and why. I’ve discovered over the years that there's a bit of confusion between Certificates of Insurance and Evidence of Insurance. If you know up front what type of verification you need, you'll get what you need when you need it.

So here’s what you should know about Evidence of Insurance.

As a business owner, you may have some expensive equipment that you’ve decided to lease rather than buy. Maybe it’s a copier, computers, a phone system or specialty equipment for your industry.

The company you’re leasing from will probably ask for Evidence of Insurance. Basically, they want to make sure that the equipment will be insured if something happens to it. For example, the lending company wants to be covered if the equipment is damaged or destroyed in a fire, from vandalism, etc.

Having the name and address is crucial in making sure the Evidence of Insurance gets to the right person.

Because you have purchased a new piece of equipment, it may lead to a discussion with your agent about additional coverage like equipment breakdown insurance.

When you’re signing a lease, some companies may offer to purchase the insurance on your behalf – and then bill you. That may sound like an easy option – but check out the details before signing off on this type of agreement.

In some instances, the insurance may be more costly than if you buy it yourself. And some lease agreements allow the lending company to continue billing you for insurance – even if you’re no longer leasing the equipment. Once you are no longer leasing the equipment, be sure to cancel the insurance.

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Comments

Interesting post.

It's almost as if insurance review should be a principle component when reviewing cash flow in your business.

There could be hidden expenses not readily apparent to an entreprenuer, but easily recognized by an insurance professional.

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