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.
TABLE OF CONTENTS
- Certificate of Insurance Overview
- What a Certificate of Insurance Includes
- Who May Need a Certificate of Insurance
- How to Get a Certificate of Insurance
- How to Add an Additional Insured to a Certificate of Insurance
- FAQ
Certificate of Insurance Overview
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.
When to Ask for a Certificate of Insurance
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.
Types of Certificates of Insurance
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:
General liability insurance certificate
This document confirms that a business has general liability insurance, covering claims related to bodily injury, property damage and personal injury.
Certificate of insurance for contractors
This COI demonstrates that contractors have the necessary insurance coverage, such as liability and workers' compensation, to protect against job-related risks.
Certificate of insurance for small businesses
Tailored for small businesses, this COI verifies that the company has essential coverages like general liability, professional liability and property insurance.
What a Certificate of Insurance Includes
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.
Who May Need a Certificate of Insurance
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.
MONEYGEEK TIP
Providing a COI may be important for your business. However, it’s equally important to request a COI before working with other business vendors. Doing so can protect your business from potential liabilities and risks that may arise during a project or contract.
How to Get a Certificate of Insurance
Whether you need a COI for business purposes, contractual obligations or peace of mind, the following steps will help you acquire the necessary documentation efficiently.
1
Contact your insurance provider
Contact your insurance agent or broker with your request. Provide them with the certificate holder's details, including their name, address and any particular coverage details they require.
2
Review the COI
Once your insurance provider issues it, review it carefully to ensure all information is accurate and meets the certificate holder's requirements. Pay close attention to coverage types, policy limits and effective dates.
3
Distribute the COI
After verifying the details, send the COI to the certificate holder or any other relevant parties. Keep a copy for your records in case any future verification is needed.
HOW MUCH DOES A COI COST?
After purchasing an insurance policy, business owners receive a COI for free. Even if you request it again afterward, insurers do not typically charge extra for providing COIs.
How Long It Takes to Get a Certificate of Insurance
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.
How to Add an Additional Insured to a Certificate of Insurance
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.
FAQ
We answered your most commonly asked questions about COIs so you can stay informed about your business insurance needs.
What is a certificate of insurance?
A certificate of insurance (COI) is a document that provides proof of insurance coverage, outlining key details such as the type of insurance, policy limits and effective dates.
When does a COI expire?
COIs expire at the same time as your policy expires. However, expired COIs should always be kept on file for some time in case of future legal problems. For instance, you can prove coverage was in place if a lawsuit is filed.
How do you get a certificate of insurance?
Contact your insurance provider or broker to get a COI, who can issue the document based on your current policy details.
Who is the certificate holder on a COI?
The certificate holder is the individual or entity that requests proof of insurance from the insured party.
What is a COI form?
A COI form is a standardized document used to create a COI, detailing the coverage information for verification purposes. A COI includes information like the name and contact details of the policyholder, policy numbers, coverage types and effective dates.
Who is issued a certificate of insurance with a group insurance policy?
In a group insurance policy, a certificate of insurance is issued to each individual covered under the group plan, providing proof of their specific coverage.
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About Melissa Wylie
Melissa Wylie is the Content and SEO Manager at MoneyGeek, with nearly a decade of editorial experience and six years of work in financial content focused on small businesses. She previously held SEO positions at Bankrate and LendingTree, with bylines on ValuePenguin and MagnifyMoney.
Wylie has a journalism degree from the University of North Texas. Her strong foundation in journalism helps her craft content that simplifies complex financial topics to help everyone feel confident when making decisions with their money.
