Certificate of Currency: What It Is and Why Your Client Wants One

We usually produce one at renewal as a matter of course. The other times you will be asked for one are when you are going for a contract with a new customer, need to get onto a site, or are putting in a tender.

You will also need one when you finance a truck, a trailer or any other equipment, because the lender wants to see the asset is insured before it releases the money.

The last is when you ask for an endorsement on the policy, which is a written change to the cover, or a client asks to be noted as a principal. We note it, and the certificate is time and date stamped to show it is current.

Clients usually require $10 million or $20 million in public and products liability, which is the cover for injury to people or damage to property caused by your work or your products.

Some contracts ask for $30 million or $50 million, usually in mining, construction or government work, because the exposure is much bigger.

Some insurers will raise the limit to $30 million or $50 million. Otherwise, we arrange an excess layer, which is a second policy that sits on top of the first.

A certificate of currency for a truck is usually a single page on your insurer's letterhead, which your broker can arrange and send to you. It names who is insured, the insurer, the policy number and the dates of cover, and it lists the trucks and trailers the policy covers.

It also shows each section of cover with its limit: own damage, which is damage to your own truck, and legal liability, which is damage your truck does to other people's property. If a financier or a principal has been noted, their name is on it too, usually under a heading such as interested parties.

The example below uses made-up names and numbers, so read it for the layout only.

They are the same thing: both are issued by the insurer.

A confirmation of insurance is different. That is one we issue on our own letterhead, because we cannot issue a certificate of insurance. Only the insurer can.

A certificate of currency and a certificate of insurance do the same job: they show your cover is in place on the day it was issued. Some clients will take our confirmation, others need it on the insurer's letterhead.

Depending on the insurer and the type of policy, we can sometimes produce a confirmation of insurance on our own letterhead very quickly, if that is all the client needs.

If it needs to be on the insurer's letterhead, it takes anywhere from a couple of hours to about 24 hours.

That depends on whether there are any endorsements or requirements being requested. A plain certificate is quick. One that has to note a principal or add special wording takes longer.

The usual mistakes are spelling, the dates and the entity, which is the name of the insured. The other common one is a principal not being noted correctly: the client or stakeholder who has asked to be on the certificate.

It is usually a simple admin error. We produce the certificate and give it to our client, and they do not check it. They forward it straight to their own client to get the box ticked.

Then that client does not accept it because a name is spelled wrong, and it comes back. It costs time.

If you are going for a tender or being set up in a client's system, you do not want that back and forth. It comes back to us, we go back to the insurer, and you might lose a day.

A certificate is fairly minimal. It is similar to the policy schedule, the summary page of your policy, though every insurer sets it out a bit differently.

It does not include the policy wording, the full document with the terms and conditions, and it will not list every inclusion and exclusion, so check those with your broker.

It will not show your claims or your premiums. It also will not show what other certificates have been issued or which other principals are noted, because those are handled case by case.

If your policy is cancelled, tell your clients. The contract usually requires the people holding your certificate to be told.

A certificate only shows the cover on the day it was issued. It does not update itself, so a client holding an old certificate will not see that the policy has been cancelled.

It can, and most of the time it probably does. The head contractor's policy might cover subcontractors vicariously, meaning through the head contractor's own liability, but that is decided case by case.

So do not assume it. If you are a subcontractor, the head contractor will usually still want to see your own certificate of currency before you start.

If you employ people, a client can ask for a workers compensation certificate of currency as well as the one for your public liability.

According to the Australian Government's guide to business insurance, employers must get workers compensation insurance from an authorised insurer, and the laws vary in each state and territory.

The workers compensation certificate comes from your workers compensation insurer. It is separate from your public liability certificate under your transport liability insurance, so ask for both at the same time and send them together.

Where does payment get held up? If you do not have the right certificate of currency, the client usually will not process your purchase orders or pay your invoices.

A client will come to me and say, we need to prove our insurance or our invoices will not be paid. They may have already done the work and invoiced. They should have asked us for the certificate before going on site or starting the job.

The trouble is, if they have done the work but have not given us the contract, and we need to add wording, it might not be an hour or half a day turnaround. It might be a few days, with their invoices held up the whole time.

If you are financing a truck, a trailer or a piece of plant, the lender will want the asset insured and usually wants to be noted on the certificate before it releases the money.

We can usually arrange a certificate noting the finance company quickly once the policy is in place, as long as their details are right. Lenders generally want comprehensive cover, which also pays for damage to your own truck, because third party only cover pays for damage to other people's property and does nothing to protect the asset they are lending on.