What is a certificate of insurance (COI) and why does everyone ask for one?
A certificate of insurance is a one-page summary of your policies: who insures you, the policy numbers, the dates and the limits, as they stood on the day it was printed. Landlords, clients and general contractors ask for one because it is the fastest way to see that you are insured. It is proof, not protection: holding it gives no one coverage of their own.
- A certificate shows your coverage on the day it was printed. It is not the policy and changes nothing in it.
- Being protected under someone else's policy takes a written change to that policy, not just their certificate.
- Ask every contractor for a fresh certificate each year, and check the dates, the limits and whether you are named.
What does a certificate actually prove?
It proves that certain business policies (liability or workers' comp, for example), with certain limits, were in force on the day it was issued. It does not prove they are in force today, and it changes nothing in them.
The industry name is a certificate of insuranceCertificate of Insurance (COI) A one-page proof of your coverage, showing the insurer, policy number, and limits, that you hand to a landlord or client. Insurers call it a certificate of insurance. more →, usually shortened to COI. Most use a standard form from ACORD, the insurance industry's forms body; number 25 covers liability. The box at the top says the certificate is "issued as a matter of information only and confers no rights upon the certificate holder." It adds that the certificate does not alter the coverage and is not a contract. (Source: ACORD 25 form, sample published by the Michigan Department of Transportation)
Why does everyone ask for one?
Because anyone who hires you, rents to you or works beside you takes on risk if you are uninsured, and a certificate is the quickest way to check. Most leases and contracts require one before the work or the lease starts.
The International Risk Management Institute defines a certificate as evidence that certain types of coverage and limits have been bought. (Source: IRMI) A landlord or general contractor wants that evidence because an uninsured tenant's or subcontractor's accident can end up as their bill. So the requirement is written into the agreement, and the certificate is how you show you meet it.
What is the difference between getting a copy and being covered?
A copy makes you the person the certificate is addressed to, nothing more. Being covered means the insurer has changed the policy itself to include you, so it can defend you if you are sued over the other business's work.
The certificate holder is only the person the certificate was sent to; that box is an address line. The stronger status is when the policy itself is changed to protect you for claims tied to the policyholder's work or your property. Insurers call that being an additional insuredAdditional Insured Another person or business covered under your liability policy for claims tied to your work or property, such as a landlord or general contractor. Insurers call them an additional insured. more →: someone not automatically insured who is added at the policyholder's request. (Source: IRMI)
That written change is an endorsementEndorsement A written change attached to your policy that adds, removes, or alters coverage partway through the term. Insurers call it an endorsement., and it does the work. The standard form says so: if the holder is an additional insured, the policy must be endorsed, and a statement on the certificate does not replace that. Anyone who wants real protection asks for both the certificate and a copy of the endorsement.
How do I get one when a landlord or client asks?
Ask your agent, in writing, and send three things: the requester's exact legal name, mailing address, and the insurance section of the lease or contract.
The legal name and address go in the holder box word for word, as one insurer's guide notes. (Source: Coterie Insurance)
The contract wording matters more. If it asks to be named on your policy, for your insurer to waive its right to sue them, or for higher limits than you carry, the insurer may have to change your policy first, sometimes for an extra charge. Send the contract before you sign.
What do people look for when they read a certificate?
The dates, the limits, whether you are named and the cancellation wording, whether they are reading yours or you are reading a contractor's. Then they confirm with the agent or insurer, because a certificate can be out of date or wrong.
- The dates: the coverage dates, which insurers call the policy periodPolicy Period The dates your coverage is active, usually 12 months. Insurers call this the policy period., must span the whole job.
- The limits: the most each policy pays, which must meet your contract.
- Whether you are named: the form has a column showing whether a policy names you. A mark means a written change may exist; ask for a copy.
- The waiver column: a second column shows whether the contractor's insurer has given up its right to come after you to recover what it paid on a claim. Insurers call that a waiver of subrogationWaiver of Subrogation A policy add-on where your insurer gives up the right to pursue a party you agreed by contract not to blame after a loss. Insurers call it a waiver of subrogation. more →.
- Cancellation: the standard wording only says notice will be delivered "in accordance with the policy provisions." It does not promise you will hear about it.
A contractor's workers' comp certificate also affects your own bill. At the year-end payroll review, one insurer asks for subcontractors' certificates; with none, their pay can be counted as yours. (Source: Utica National Insurance Group) See the guide to the year-end insurance audit.
Why do people ask for a fresh certificate every year?
Because an old one shows only the day it was printed. A policy can be cancelled next week for an unpaid bill, and the certificate in your file will still look fine.
A risk managers' trade magazine notes that certificates only certify coverage on the day issued, that holders are still at risk if the policy is cancelled mid-job, and that insurers do not always send cancellation notices to holders. (Source: Risk Management Magazine, RIMS)
The fix is a habit: ask for a new certificate at every renewal and before any large job, and calendar the expiration dates. If a contractor's coverage lapses mid-job and someone is hurt, the claim can reach your own liability coverage. Check your policy wording and ask your agent.
Frequently asked questions about certificates of insurance
No. Only your agent or insurer can issue one. Changing it yourself misstates your coverage; if something is wrong, ask your agent to reissue it.
A standard certificate is normally issued at no charge as part of servicing your policy. What can cost money is the change behind it: adding someone to your policy, or having your insurer give up its right to sue them, may carry an extra premium depending on the insurer.
Call the agent or insurer listed on the certificate, give them the policy number, and ask whether the policy is active and whether you are named on it. Use a phone number you look up yourself, not one printed on the certificate.
A landlord or client asking for proof of insurance?
Send us the insurance section of the lease or contract, and we will tell you what your policy already meets and what would need to change.