What Is a Certificate of Liability Insurance Form?

A Certificate of Liability Insurance (COI) serves as a concise document providing a summary of an existing insurance policy. It is a snapshot of coverage details, not the actual policy itself. It confirms that an entity holds specific insurance coverage, allowing businesses to demonstrate their insured status to clients and partners.

Defining a Certificate of Liability Insurance

A Certificate of Liability Insurance is a formal document issued by an insurance company or broker that verifies the existence of an insurance policy and serves as proof of coverage, detailing the types of liability an entity possesses. The purpose of this one-page summary is to provide evidence of insurance to a third party, such as a client, landlord, or vendor. The COI is not the insurance policy itself, but an abridged document reflecting pertinent policy details. It is generated by the insurer or broker at the request of the policyholder, verifying coverage without exposing sensitive information contained within the full policy. A standardized form like the ACORD 25 is used for liability insurance certificates, which helps streamline verification across the industry.

Key Components of a Certificate

A standard Certificate of Liability Insurance form includes several distinct sections detailing the insurance coverage.

Producer/Issuing Company Information

This section includes the name, address, and contact details of the insurance agency or broker that issued the certificate. This information allows for verification of the document’s authenticity.

Insured Information

This identifies the name and address of the policyholder whose coverage is being certified.

Insurance Company Information

This lists the names of the insurance carriers providing the coverage, sometimes designated by letters (A, B, C, etc.) to correspond with specific policies listed elsewhere on the form.

Policy Information

This details the policy numbers, effective dates, and expiration dates for each type of coverage.

Coverage Types and Limits

This specifies the various kinds of liability coverage, such as General Liability, Auto Liability, or Workers’ Compensation. This area also quantifies the coverage amounts, showing per-occurrence and aggregate limits, which indicate the maximum payouts for a single incident and over the policy period, respectively.

Description of Operations/Locations/Vehicles

This provides a brief explanation of the insured’s business activities or the specific project, location, or vehicles covered by the policy.

Certificate Holder Information

This designates the entity requesting the certificate, including their name and address. This party receives the COI as evidence of insurance but does not receive protection under the policy unless also listed as an additional insured.

Cancellation Clause

This includes standard language indicating that the certificate holder will receive notification if the policy is canceled before its expiration date, though this notification does not create liability if not given.

Common Use Cases for a Certificate

Certificates of Liability Insurance are widely used in various business and contractual scenarios to ensure financial protection and compliance. They establish trust and manage risk across a wide array of business interactions.

Contractual Agreements

Businesses entering into contracts with clients, vendors, or partners are required to show proof of insurance. For example, a contractor needs to provide a COI to a homeowner or general contractor before beginning work. This reassures the hiring party that potential damages or injuries caused by the contractor’s work are covered.

Leasing Commercial Property

Landlords require tenants to provide a COI as proof of liability insurance. This protects the property owner from potential liabilities arising from the tenant’s operations.

Event Planning

Venues or organizers require proof of insurance from event hosts, vendors, or performers to mitigate risks during gatherings.

Government Regulations/Licensing

Certain industries or professions mandate proof of insurance for licensing or compliance purposes. This ensures that businesses operating in regulated sectors maintain adequate coverage to protect the public.

Vendor or Supplier Relationships

Businesses require their vendors or suppliers to provide COIs, ensuring that third-party service providers carry sufficient insurance to cover potential liabilities they might cause.

Securing Loans or Financing

Lenders require proof of insurance for business assets or operations being financed.

Obtaining and Understanding a Certificate

Obtaining a Certificate of Liability Insurance is a straightforward process for a policyholder. The policyholder does not fill out the form themselves; it is generated by their insurance agent or broker based on existing policy details. Requests can be made through various channels, including phone, email, or an online portal provided by the insurer. When requesting a COI, the policyholder will need to provide specific information, such as the full name and address of the certificate holder and the reason for the request. Any specific coverage requirements or additional insured endorsements should also be communicated to the insurer or broker.

Understanding a Certificate

Once a COI is received, understanding its contents is key to ensuring it meets all necessary requirements. The recipient should verify the Insured Information to confirm that the business name on the certificate matches the vendor or contractor they are working with. Checking the Policy Information, specifically the effective and expiration dates, ensures coverage is active throughout the duration of the project or agreement. If the policy expires before the project’s completion, a renewal certificate should be requested.

Reviewing the Coverage Types and Limits ensures they meet or exceed any contractual requirements. This includes confirming the types of liability coverage, such as general liability and workers’ compensation, and their respective monetary limits. The Certificate Holder Information should clearly list the requesting party’s name and address. If there are doubts about the certificate’s authenticity or accuracy, contacting the issuing producer or insurance company directly is a recommended step for verification.