What Is a Certificate of Insurance?

A Certificate of Insurance, or COI, is a document issued by your insurance company to provide proof of insurance coverage. A COI not only verifies the existence of current insurance coverage but also recaps the basic conditions and key aspects of the policy. A standard Certificate of Insurance includes these details:

• Policyholders name
• Policy's effective dates
• Type of coverage
• Policy limits

Who Needs to Have a Certificate of Insurance?

A COI is similar to a Proof of Insurance card for your vehicle – something you may be required to produce if you're ever pulled over by the police or involved in a car accident. A COI is something you'll want to have on hand if you're involved in a business that provides a service or performs work where there's a potential for being held liable.

In reality, every business out there needs to have business insurance in place, especially liability coverage, but not every business owner will be called on to produce their COI as proof of their insurance coverage.

More likely, companies that do jobs outside of their office should have a COI on hand, ready to show to a customer hiring them or considering having them do some work. If, for example, you're hiring a local company to reroof your home or to build a backyard fence, you want to know they have the ability to cover the cost of a liability claim.

Anyone you hire to do work where someone could get injured or lose money should be insured, and asking for a look at their COI will be evidence of said insurance. If they can't produce this proof of insurance, you may be better off hiring someone who can.

A contractor undertaking a significant job should have a current COI, and any subcontractors hired for the job should also be able to produce proof of insurance.

Reasons Why Certificates of Insurance are Important

• A COI summarizes your insurance status on one simple form, without the need to produce an entire insurance policy. Often, companies seeking bids will require one as part of the bidding package.
• Carefully documenting the insurance coverage of your subcontractors and third-party vendors covers your need of having essential insurance coverage to protect yourself in the event that something goes wrong.
• A COI is a convenient way of proving you're insured and can save you time and trouble when seeking jobs.