What is a certificate of insurance?

A certificate of insurance is a document that summarizes your full business insurance policy. Your insurance provider will send you a copy of your COI when it is requested to provide a good or service. Contractors and subcontractors are required to provide a COI to fulfill projects in most cases.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent Laura Walker

UPDATED: Feb 25, 2022

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The Rundown

  • Certificate of insurance is often referred to as a COI
  • If you provide a good or service for another person or company, you may be asked for a COI
  • COIs are a one-page summary of insurance coverage 

Whether you are the contractor or the contractee, verifying your assets with a certificate of insurance will help you have peace of mind for the duration of your work projects. These documents are usually shared by the construction company for proof of business insurance. However, a certificate of insurance may be required whenever you’re a third-party service provider doing business with another entity. 

This proof of insurance may be kept on file or disposed of after the project is completed. However, some businesses find that keeping these documents for a short period after completion may be helpful if a surprise lawsuit were to appear. 

Keep reading to learn more about certificates of insurance and how to get yours from your insurance provider. If you need business insurance, use our free tool to speak with an agent. 

What is a certificate of insurance?

A certificate of insurance, or a COI, verifies an insurance policy. It is a document from an insurance company or broker that summarizes your company’s insurance policy. A COI is a one-page sheet stating your policy’s standard details and contact information. 

Think of a certificate of insurance as similar to your health or car insurance card. 

Its sole purpose is to provide proof that your policy exists, how much you’re covered for, and your term dates. Keep reading to learn more about how to request a certificate of insurance from a vendor.

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Basics of Certificates of Insurance

When a company asks you to provide proof of insurance, you are providing a good or service that involves a high risk of liability and/or significant losses. 

A certificate of insurance, as we learned, is just a document. But, it’s crucial in construction and vendor contracts because it reduces the risk to your company. Its only purpose is to provide security for a business and its clients. 

For example, Company A requests a COI from Company B to perform construction work. Company A is asking to be put on that policy for the gestation of the project/contract period, meaning Company A will be reflected as an additional insured. This is done so if Company A gets sued or there is an accident because of work done under contract, Company B’s insurance will cover the damage. 

An additional insured refers to someone other than the policyholder who is covered by the insurance policy.

You must do your due diligence when conducting your background check into your contractor or vendor agreement. Business insurance policies are long documents that speak to the specifics of the policyholder. It may be challenging to capture all the stipulations of a policy in one page. 

These documents are routine and provide the security to outsource a good or service on contract. 

Whether your business is hired as a contractor or a vendor, it will be beneficial to keep track of these. You don’t want to get caught in the dark and forced into costly litigation. 

How do you get a certificate of insurance?

Usually, a COI is provided upon purchase of business liability insurance. If you do not receive a certificate of insurance, you need to ask your insurance provider/broker for it. Your policy issuer is the only entity with this document. You may be able to get a certificate of insurance online, depending on your provider.

We will go over how to get a certificate of insurance, but first, let’s look at the two types of certificates. In the next section, we break down liability and worker’s comp certificates of insurance.  

Types of Certificates of Insurance

So, now we understand how a COI is different from your insurance policy. But, which one will you require for your business? There are several different types of commercial insurance scenarios that may require a COI.

Certificate of Liability Insurance

COIs are often required for liability coverage, which isn’t an accident. Whether you’re asked to provide a COI or require insurance certificates for subcontractors, it indicates that there is the added risk of a third party around your business. 

Another scenario of when you will need a certificate of insurance is selling street food under city ordinances. As a food truck providing food service in your hometown, you may be required to provide a COI because you pose a threat to public health. 

Certificate of Worker’s Compensation Insurance

Any business with employees is required to have worker’s compensation insurance in just about every state. In some places, subcontractors may also be considered employees of your business, and therefore entitled to worker’s compensation.  

The third type of COI covers auto insurance, but it is not common.

A COI is a safety net for small business owners and contractors against liability in workplace accidents or work-related injuries. These documents are important because they prove your insurance status and shift the liability to the company that causes any damage or injury during the contract.

A Certificate of Insurance Doesn’t Guarantee Coverage

A certificate of insurance represents the policy at the point of purchase, not the actual policy. 

According to the International Risk Management Institute, a COI verification doesn’t carry any weight on the policy. But what does that mean? The IRMI says:

“A Certificate of Insurance is NOT an insurance policy and does not serve to provide, endorse, amend, extend, or alter the terms of an insurance policy. Only an endorsement, rider, or amendment to the policy can effect changes in coverage. Reference to a contract between the client and the third party on a certificate does not provide coverage.”

There may be liability insurance situations that are more complex than a one-page COI to reflect. Business insurance policies are complex documents that can be tens of pages long. There could be unforeseen loopholes or misrepresented information.

It is illegal for a company to fabricate or mislead insurance information reflected on a COI. However, mistakes happen. 

You may also run into trouble if a business requires specific insurance terms or a specific format that the certificate of insurance didn’t meet. This is why it is crucial to speak with insurance experts and make sure you are working with licensed professionals.

How long should I keep a COI?

Unfortunately, there may be circumstances when your project is out of line with a contractor’s insurance policy. While a COI is intended to provide security against a lawsuit or damages, that’s not always the case.  

Keeping track of your certificates of insurance when you’re the contractee or the contractor is based on personal preference. It is recommended that you keep records after a project has finished if an issue arises later down the line. 

Proof of insurance protects your business while ensuring that any victims receive appropriate restitution. Even in a labor dispute, a certificate of insurance can help reflect the status of employees. Also, keeping a COI may help you receive or be denied back pay in these disputes. 

Some companies and programs offer your business a hub to make COI tracking easier. 

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The Bottom Line: What is a certificate of insurance?

When your certificate of insurance is being prepared, you want to make sure your information is clear and correct. This document may be small, but it holds a lot of power in keeping you and your business safe. 

A COI should not be confused with the policy itself or a single type of insurance. If your business doesn’t have coverage, that’s where you need to start. 

If you’re looking to get your business covered, use our free tool. Enter your ZIP code to speak with agents in your area.  


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