Certificate of Insurance: What It Is & How It Works

A certificate of insurance (COI) serves as a concise summary of an insurance policy, issued by an insurance company or its authorized agent. It provides a snapshot of specific coverage details without revealing the entire underlying policy document. The primary purpose of a COI is to offer proof of insurance coverage to a third party, often referred to as the “certificate holder.”

This document confirms that the named insured carries certain types of insurance with specified limits. It is not the insurance policy itself, nor does it amend, extend, or alter the terms, conditions, or exclusions of the actual policy. Instead, it acts as a verification tool, demonstrating financial responsibility and helping parties meet contractual obligations.

Key Information on a Certificate

A standard certificate of insurance contains several distinct sections, each providing specific details about the policy and the parties involved. Understanding these components is important for anyone reviewing a COI. The certificate typically begins by identifying the insured, which includes the full legal name, address, and contact information of the policyholder.

Following the insured’s details, the certificate lists information about the insurer, including the name and contact details of the insurance company providing the coverage. This section also outlines the policy details, such as the unique policy number, the effective date, and the expiration date.

The core of the COI details the various coverage types and their corresponding limits. Common types of coverage often displayed include General Liability, Commercial Auto Liability, and Workers’ Compensation. For each coverage type, the financial limits of liability are specified, representing the maximum amount the policy will pay for a covered claim.

The certificate also includes information about the certificate holder, which is the name and address of the entity or individual requesting the COI. In some cases, a “Description of Operations/Locations/Vehicles” section might be present, providing specific context for the coverage, such as details about a particular project, property, or vehicle.

Beyond basic coverage, a COI may note special provisions or endorsements. This can include requirements like adding the certificate holder as an “additional insured,” which extends certain protections of the policy to that third party. Another common provision is a “waiver of subrogation,” which prevents the insurer from seeking recovery from the certificate holder after paying a claim. The certificate concludes with a signature from an authorized representative of the insurer or broker, attesting to the accuracy of the information provided.

Requesting a Certificate

The process of obtaining a certificate of insurance typically begins when a third party requires proof of an entity’s insurance coverage. As the insured, you will need to provide specific information to your insurance agent or broker to facilitate the request.

You will need the full legal name and complete mailing address of the entity or individual who needs to receive the certificate. It is also important to specify any particular coverage types and minimum liability limits that the requesting party requires. For instance, a contract might mandate a certain amount of general liability coverage.

Additionally, ascertain whether the requesting party needs to be listed as an “additional insured” on your policy or requires a “waiver of subrogation.” These are common contractual stipulations that impact the scope of coverage extended to the third party. You should also clarify the specific purpose of the certificate, such as for a particular construction project, a commercial lease agreement, or an upcoming event.

Finally, confirm the preferred method for the certificate to be sent, whether by email, mail, or fax, and provide the correct contact information for delivery. Once all necessary information is collected, contact your insurance agent or broker directly to make the request. A COI is typically issued within one to two business days, though complex requests might take slightly longer.

Understanding and Verifying a Certificate

Upon receiving a certificate of insurance, the certificate holder should undertake a thorough review to ensure it meets all specified requirements and is authentic. The initial review involves checking several key elements against your contractual or operational needs. First, confirm that the insured’s name precisely matches the entity with whom you are conducting business, and verify that your organization is accurately listed as the certificate holder.

Next, examine the policy effective and expiration dates to ensure they encompass the entire duration of your engagement or project. It is important that the coverage remains active throughout the period you require protection. Verify that all required types of coverage, such as General Liability, Commercial Auto, or Workers’ Compensation, are listed and that the financial limits for each meet or exceed your predetermined specifications.

Pay close attention to any special provisions or endorsements. Confirm that critical requirements, such as your status as an “additional insured” or the inclusion of a “waiver of subrogation,” are clearly noted on the certificate if they were part of your agreement. Finally, check for a clear signature from an authorized representative of the insurance company or broker, which indicates the document’s official issuance.

To confirm the authenticity and accuracy of the certificate, it is advisable to contact the issuing insurance company or broker directly. Use contact information obtained from an independent source, such as the insurer’s official website or a trusted directory, rather than relying solely on the contact details provided on the COI itself. This direct verification helps prevent reliance on fraudulent or altered certificates. For long-term agreements, establish a routine to request updated certificates periodically, as policy terms or coverage can change or expire over time, impacting your protection. If any discrepancies or concerns arise during your review, promptly contact the insured to request a corrected certificate or clarification.