Certificate of Insurance (COI)
A COI ( Certificate of Insurance) is a statement of coverage issued by an insurance company that provides coverage to your business. It shows a summary of coverage for your business insurance.They should include the name insured, policy number, coverage provided, coverage term, and name of issuing carrier. Here are some commonly asked questions pertaining to a COI.
Why is a COI needed?
- A COI provides a summary of your business coverage. Potential clients of your business will request a COI when conducting business with you to verify that the business is indeed insured.
Examples of why companies may request a COI:
- Landlords
- When you lease a building (or part of a building) and run your business from it, your presence exposes your landlord to certain risks.
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Vendors
- Suppliers or vendors might require you to provide a certificate of liability insurance to ensure that they will be covered if you harm their business or harm a customer as you use their products.
- When something goes wrong on a project, general contractors want to know that your insurance policy will cover problems resulting from the work you performed.
- Property owners want to know that if your work causes damage to their property, your insurance will pay for repairs.
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Banks
- Since they have an interest in the property that you are financing through them, they want to know that your insurance will cover them if a lawsuit arises from that property’s operation.
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Business Relationships
- Usually, large companies with risk management or compliance departments will require all vendors to file a certificate regardless of what tasks you are performing.
What types of businesses need a COI?
- Any business that provides a service or performs work where there is potential for high liability losses.
What are the benefits of a COI?
- Relatively easy to obtain
- Do not require additional resources for review
- Convenient in providing basic information showing coverage exists at a specific time
What are some limitations of a COI?
- It is not the actual insurance policy or legal equivalent.
- It is not a contract between an insurance carrier and the certificate holder or policy holder.
- It does not show that endorsements have been added to the policy which will reduce coverage amounts.
- Courts usually favor policy language over that in the COI.
What is the difference between a certificate holder and additional insured?
- Certificate Holder possess proof of insurance on commerical general liability policies
- Additional Issured are other parties’ coverage has been extended to, beyond the initial policyhodlers.
DISCLAIMER: Every state varies on the use of COI’s as a legal equivalent. Please refer to your specific state in regards to how COI’s are handled.
To request a COI from All Insurance Services, please click here