What Is a Certificate of Insurance?

A Certificate of Insurance (COI) is a concise document providing verifiable proof of existing insurance coverage. It offers a snapshot of an insurance policy’s key details, assuring involved parties that appropriate coverage is in place. Understanding its purpose and contents can facilitate smoother business operations and compliance with contractual obligations.

Defining a Certificate of Insurance

A Certificate of Insurance (COI) is an official document issued by an insurance company or its authorized agent or broker. This document summarizes the essential terms and conditions of an insurance policy at a specific point in time. It functions as verifiable proof that an insurance policy is active and valid, often used in transactions where one party needs assurance of another’s coverage. A COI is not the actual insurance policy itself, nor does it extend, amend, or alter the coverage provided by the underlying policy.

Instead, it acts as a condensed overview, providing quick access to critical policy information without requiring review of the full policy document. The insurance company or its agent issues the COI, typically at the request of the policyholder, to provide to a third party. This third party, known as the certificate holder, receives the COI to confirm the policyholder’s insurance status.

Essential Information on a Certificate of Insurance

A standard Certificate of Insurance, often presented on an ACORD 25 form, contains specific fields detailing the policy’s coverage. The “Producer” section identifies the insurance agency or broker that issued the certificate, including their contact information. Directly below, the “Insured” section specifies the legal name and address of the policyholder. Adjacent to this, the “Insurer(s) Affording Coverage” lists the name of the insurance carrier(s) providing the coverage.

Key policy information includes the policy number, the effective date when coverage began, and the expiration date, indicating when the policy term ends. The COI also delineates the “Types of Coverage” held, such as General Liability, Automobile Liability, or Workers’ Compensation, specifying the particular risks covered. The “Limits of Liability” section details the maximum amounts the policy will pay for covered losses per occurrence or in aggregate.

The “Certificate Holder” information identifies the individual or entity requesting the COI, often including their address. A “Cancellation Clause” is also present, stating that the certificate holder will be notified a certain number of days in advance if the policy is canceled before its expiration date. Lastly, a “Description of Operations/Locations/Vehicles” may provide brief details about the specific work, project, or property covered by the policy, along with any special endorsements like additional insured status.

Common Scenarios for Certificates of Insurance

Certificates of Insurance are frequently requested in various commercial and contractual relationships to mitigate financial exposure.
Contractors, subcontractors, and vendors are often required to provide COIs to clients before commencing work. This ensures that if an incident occurs, the contractor’s insurance can respond, limiting the client’s potential liability.
Landlords commonly require tenants to furnish COIs as proof of liability or property insurance, protecting the property owner from claims arising from tenant activities.
Event organizers or venues often demand COIs from participating vendors, exhibitors, or performers to ensure they are adequately insured for any potential incidents during an event.
Government entities and public organizations frequently mandate COIs for projects or services, confirming that businesses performing work for them meet specified insurance requirements.
Lending institutions, such as banks, also typically request COIs as proof of property insurance when providing financing secured by real estate or other assets.

Steps to Obtain a Certificate of Insurance

Obtaining a Certificate of Insurance is a straightforward process, primarily handled through your insurance provider. The first step involves contacting your insurance agent or broker, as they are authorized to issue COIs on behalf of your insurer. Many insurance providers also offer online portals where policyholders can request and generate COIs directly.

When making the request, you will need to provide specific information about the party requiring the COI, known as the certificate holder. This typically includes their full legal name, address, and any specific coverage requirements or endorsements, such as needing them listed as an “additional insured”. Provide a brief description of the operation or reason for the request. Once the COI is issued, review it carefully to ensure all information is accurate and meets the requirements of the requesting party. The COI can then be delivered via email, mail, or through an online sharing link.