Certificate of Insurance (COI)

What is a certificate of insurance?

A certificate of insurance (COI) is a short document, usually one page, that summarizes your business insurance. It proves to someone else (a client, landlord, venue or general contractor) that your policies exist and shows their key details.

In the U.S., the most common form is the ACORD 25, Certificate of Liability Insurance. It's a standardized form most insurers and agents use, so clients know where to find each piece of information.

What a COI shows

Walking through an ACORD 25, section by section

Example: Here is how a certificate for a small painting company might read, top to bottom. The details are illustrative.

1. Date: the date the certificate was issued. A certificate is a snapshot on that date only.
2. Producer: the agency or broker that placed the insurance, with a contact name and phone number. This is who you call to verify the certificate.
3. Insured: the painting company's legal name and address. It should match the name on the client's contract.
4. Insurers affecting coverage: lettered lines (Insurer A, B, C) naming each insurance company. Each coverage row points to one of these letters.
5. Coverages table: one row per policy, such as commercial general liability, automobile liability, umbrella or excess, and workers' compensation and employer's liability. Each row shows the policy number, effective and expiration dates and the limits, such as each occurrence and general aggregate.
6. ADDL INSD and SUBR WVD columns: small boxes marked "Y" when additional insured status or a waiver of subrogation applies to that policy.
7. Description of operations / locations / vehicles: free-text notes, such as the job address or a statement that the certificate holder is an additional insured per a written contract.
8. Certificate holder: the client's name and address.
9. Cancellation: standard wording about notice if the policy is cancelled.
10. Authorized representative: the signature of the agent or insurer representative.

Red flags of a fake or misleading certificate

If you're the one collecting certificates from subcontractors or vendors, watch for:

• Expired dates or dates that don't cover the work period
• Missing policy numbers or limits left blank
• An insurer name you can't find with your state insurance department
• A producer with no working phone number or email
• Different fonts, misalignments or edits that suggest the form was altered
• A business name that doesn't match the contract or license
• "Additional insured" typed in the description with no "Y" in the ADDL INSD column

When in doubt, call the producer listed on the certificate and confirm the policy is active. Many businesses verify every certificate before work begins.

Who asks for a certificate of insurance?

You'll be asked for a COI when someone wants to know they won't be stuck paying for your mistakes. Common examples:

• Clients and property managers before you work on their property
• General contractors before a subcontractor starts (see general contractor insurance)
• Landlords before you move into a leased space
• Event venues and organizers before you set up (see event insurance)
• Salons and studios before renting a booth or room, for example to hair stylists and personal trainers

Certificate holder vs additional insured

These two terms cause the most confusion:

• Certificate holder: the person who receives the certificate. Being the certificate holder simply means they got proof. It gives them no coverage under your policy.
• Additional insured: a person or company added to your policy by an endorsement, so your policy can protect them if they're sued because of your work. Clients and general contractors often require this.

Example: A property manager hires a cleaning business. A visitor slips on a freshly mopped floor and sues both the cleaner and the property manager. If the property manager was added as an additional insured on the cleaner's general liability policy, that policy can also defend the property manager. If they were only the certificate holder, it may not.

To make someone an additional insured, your insurer has to add the endorsement to your policy. Simply typing it on the certificate isn't enough.

What is a waiver of subrogation?

After paying a claim, an insurer can sometimes sue the party that caused the loss to get its money back. This is called subrogation. A waiver of subrogation is an endorsement in which your insurer gives up that right against a specific party, often your client. Contracts commonly require it on general liability and workers' compensation policies. Some insurers charge for it.

How to get a certificate of insurance

1. Get the request in writing, including the exact name and address of the certificate holder and any required endorsements.
2. Check that your current policies meet the required limits.
3. Ask your agent or insurer. Many business insurers let you download certificates online in minutes.
4. Send the certificate and keep a record of who has one.

Most insurers issue certificates free as part of your policy. If you don't have business insurance yet, start with general liability insurance, the coverage nearly every COI request asks for. See what it costs in our cost guide.

Tips

• Never edit a certificate yourself. Altering a COI is fraud and won't change your coverage.
• Watch expiration dates. Clients will ask for a new certificate after renewal.
• Match the contract. If the contract requires $2 million per occurrence and you have $1 million, consider a commercial umbrella policy.