What Is a Certificate of Insurance (COI)?

A certificate of insurance (COI) is a document that proves your business has an insurance policy. It’s also known as a certificate of liability insurance or a certificate of general liability insurance, depending on the coverage being confirmed. A COI is only attainable after you purchase a policy and is often used to prove to clients, vendors or other parties that your business is insured before you do business with them.

The primary purpose of a COI is to provide evidence that an individual or business holds active insurance coverage. This document includes vital details such as the type of insurance, coverage limits, policy effective dates and the insurer's name. It does not serve as a contract but offers a snapshot of the insurance policy.

A COI can prevent potential disputes and ensure all parties know the existing coverage. This is especially important in industries with high liability risks, such as construction, real estate and event planning. By presenting a COI, businesses can fulfill contractual obligations and demonstrate their commitment to risk management.

Knowing when to request a COI can help protect your interests. Typically, a COI is asked for before entering into a contract or agreement with another business party. This ensures that the party you engage with has the insurance coverage to mitigate potential risks.

Here are some common scenarios when you might request a COI:

• Hiring contractors: To ensure contractors have liability insurance to cover any damages or injuries that may occur during work.
• Event planning: To confirm that venues and vendors have appropriate coverage to protect against potential liabilities.
• Lease agreements: To verify that tenants have insurance coverage to protect the property and comply with lease requirements.
• Partnerships: To ensure business partners have adequate coverage to safeguard shared ventures.
• Subcontracting: When hiring subcontractors, to ensure they have insurance coverage to avoid assuming risks.
• Service agreements: For long-term service agreements, to confirm that the service provider maintains appropriate insurance throughout the contract period.

COIs come in various forms, each designed to address specific coverage needs for different situations. We highlight a few of the most common types of COIs below:

While the specific information can vary based on the type of insurance and the issuing insurer, there are several common elements included in most COIs, such as:

• Insured’s information: The name and contact details of the individual or business that holds the insurance policy. This section identifies who the coverage applies to and confirms their insured status.
• Insurer’s information: The name and contact details of the insurance company providing the coverage. This information allows verification of the insurer's credibility and authority.
• Policy numbers: The COI lists the unique identifiers for each insurance policy. These numbers are essential for tracking and referencing the specific policies in question.
• Coverage types: A summary of the types of insurance coverage included, such as general liability, auto liability and workers' compensation. This section helps identify the scope of the protection provided.
• Policy limits: The maximum amount the insurance company will pay for a covered claim under each type of coverage. Understanding these limits is crucial to assess if the coverage meets your needs.
• Effective and expiration dates: These are the start and end dates of the insurance policy coverage. These dates ensure the policy is active and specify when it will need renewal.
• Additional insured: Any individuals or entities other than the primary insured covered under the policy. This section ensures that the insurance also protects relevant third parties.
• Description of operations: Specific details about the nature of the business or operations covered by the insurance policy. This information clarifies the context and scope of the coverage provided.

This information helps provide specific evidence of the type of policies your business has and efficiently communicates your level of existing coverage.

While having a COI to present to potential and existing customers can grant them peace of mind, not all companies need to showcase it or provide it. For instance, if you run a restaurant, you obviously don’t need to provide a COI to every diner. Some examples of businesses that often need a COI include, but are not limited to:

• Electrical services or repairs
• Plumbing companies
• Landscaping businesses
• Consultancies
• Construction companies
• Cleaning services
• Property managers
• Fitness or wellness businesses

Generally, businesses that render a service to customers or other businesses are most often required to provide a COI. Businesses that have to bid for contracts may also need a COI.

COIs typically have a quick turnaround time, but how long it takes will depend on the insurer. If you can request a COI with your provider online, you can often get a copy instantly. However, if you have to call your insurer, you may have to wait anywhere from a few minutes to a few hours.

An “additional insured” refers to another individual or entity covered by your business insurance. This coverage can be added temporarily for a project or for the policy’s lifetime.

Adding entities or individuals to a policy may be a requirement in some contracts to do business with a client or bigger company. For instance, a big company may insist that a small business add them to their insurance for a project, or a vendor may require that both the owner and the business are in the COI.

If you need to give someone or a business additional insured status, you can typically do so by contacting your insurer or applying to do so online.

We answered your most commonly asked questions about COIs so you can stay informed about your business insurance needs.