The Ins and Outs of Certificates of Insurance

Newsletter 15-04

A certificate of insurance (COI) is a document that provides evidence of insurance coverage. It is a routine request by project owners to ensure that a contractor has adequate insurance coverage when bidding on a job and before hiring. It’s also requested by general contractors (GCs) who want proof of insurance from subcontractors (electricians, roofers, landscapers, etc.) before performing work on a specific job.

A COI typically includes information about the contractor’s insurance coverage, including the name of the insurance company and agency, type of coverage, policy number, effective dates, and coverage limits. It will also include the name of the policyholder (the contractor) and an additional insured party such as the client or other party involved in the project, and the name and contact information of the entity or person requesting the COI.

It’s important to note the difference between a certificate holder and an additional insured. A certificate holder is the person receiving the COI by the named insured and is listed on the COI as a recipient but not afforded any protection by the policies listed. An additional insured benefits from the protection under the policy listed, similar to the named insured.

Often COIs are used to show proof of General Liability, Auto Liability, and Workers’ Compensation insurance.

What’s the Difference Between a COI and an Insurance Policy?

While a COI is a summary of important information in an insurance policy demonstrating you have insurance, the actual policy issued by the carrier is more detailed. The policy is a contract and contains all the necessary information regarding covered perils, terms and conditions, exclusions, and what to do in the event of a claim.

Why Does a COI Matter?

A COI demonstrates that a policy is in effect as of the date and time of the certificate issuance.  Project owners will typically ask to be named as additional insured under a GC’s insurance policies. Similarly, GCs will usually ask to be named as an additional insured under their subcontractors’ insurance policies. If a subcontractor, for example, causes damage and you, the contractor, are named in the lawsuit, as an additional insured, the claim may be covered under the subcontractor’s policy rather than your own policy. Many insurance policies, including General Liability, can be endorsed to add additional insured status. Coverage can be added for a specific time period, the duration of a specific project, or the duration of the policy.

Verify the COI

Remember, a COI is a snapshot and summary of coverage at the time it is generated. A project owner will likely ask to call your insurance agent who issued the COI to verify the policy information and effective dates. You should do the same with all your subcontractors’ COIs. Call their insurance agents to verify the insurance policy or policies will likely be active during the time you expect to work together and the appropriate policy limits are in place.