What Is a Certificate of Insurance (COI)?

A certificate of insurance (COI) is a standardized one-page document that provides proof of your business insurance coverage. It summarizes the key details of your active insurance policies including the types of coverage you carry, your coverage limits, policy numbers, effective dates, and the names of your insurance carriers. The COI is issued by your insurance agent or carrier and is provided to third parties who need to verify that you have insurance.

The standard COI form used across the insurance industry is the ACORD 25 form, developed by the Association for Cooperative Operations Research and Development. This standardized format ensures that COIs are consistent and readable regardless of which carrier or agent issues them. The ACORD 25 is recognized and accepted by virtually every industry, making it the universal proof of insurance.

It is important to understand that a COI is not an insurance policy. It does not modify, extend, or alter the terms of your actual insurance policies in any way. The COI is simply a snapshot summary that confirms coverage exists as of the date it is issued. The actual terms, conditions, exclusions, and limitations of your coverage are contained in your policy documents, not the COI.

The ACORD 25 certificate of insurance contains several key sections of information that the requesting party uses to verify your coverage meets their requirements.

The producer section identifies your insurance agent or broker, including their name, address, phone number, and contact information. This is the party to contact for questions about the certificate or to request changes.

The insured section lists your business name and address as it appears on your insurance policies. This confirms the identity of the business that holds the coverage and should match the business name used in contracts and agreements.

The insurers section lists the insurance companies providing your coverage. Each carrier is assigned a letter (Insurer A, B, C, etc.) that corresponds to the policies listed below. The carrier's NAIC number is also shown, which is a unique identifier assigned by the National Association of Insurance Commissioners.

The coverage section is the most detailed part of the COI. It lists each type of coverage you carry, including the carrier letter, policy number, effective and expiration dates, and coverage limits. Common coverage types shown include commercial general liability, commercial auto, umbrella/excess liability, and workers' compensation. Each coverage type has specific limit columns that show per-occurrence, aggregate, and other applicable limits.

The certificate holder section identifies the party who requested the COI and to whom it is being provided. This section also indicates whether the certificate holder has been named as an additional insured through a policy endorsement.

Nearly every business will need to provide COIs at some point, and many businesses need them on a regular basis. The situations that most commonly require a COI include signing a commercial lease, bidding on contracts, entering subcontracting agreements, participating in events, and onboarding as a vendor for larger companies.

Landlords and property managers almost universally require COIs from tenants showing general liability and property insurance. The COI verifies that the tenant has coverage in place to handle claims arising from their operations in the leased space. Most leases specify minimum coverage limits and require the landlord to be named as a certificate holder or additional insured.

General contractors require COIs from every subcontractor before allowing them on a job site. The COI verifies that the subcontractor carries general liability, workers' compensation, and commercial auto coverage at or above the minimums required by the contract. Without a current COI, subcontractors cannot begin work.

Large corporate clients and government agencies require COIs from vendors and service providers as part of their vendor onboarding process. These requests often come with specific coverage requirements including minimum limits, required coverage types, and additional insured designations. Meeting these requirements is essential for maintaining the business relationship.

Event venues, convention centers, and public facilities require COIs from event organizers, exhibitors, and vendors. The COI confirms that the party using the facility has liability coverage to address claims that might arise during the event.

Reading a COI starts with verifying the basic information at the top of the form. Confirm that the insured name matches the business entity you are doing business with. Verify the policy dates to ensure coverage is current and will not expire during the term of your contract or project. Check that the carriers listed have adequate financial ratings, which you can verify through AM Best or similar rating agencies.

Next, review the coverage types and limits in the coverage section. For general liability, look for per-occurrence limits of at least $1 million and general aggregate limits of at least $2 million, which are standard minimums for most commercial contracts. For commercial auto, verify that the combined single limit meets your requirements. For workers' compensation, confirm that the statutory limits are shown, indicating coverage meets state requirements.

Check the description of operations box near the bottom of the form. This section may contain important information about the specific project, contract, or relationship that the COI relates to. It also typically notes any additional insured endorsements, indicating which parties have been added to the policy. If you required additional insured status, verify that your business is specifically named in this section.

Finally, review the cancellation provision. Standard ACORD 25 forms state that the carrier will endeavor to provide a specified number of days' notice before canceling the policy, though this notice is not guaranteed. Some contracts require specific cancellation notice provisions, which may need to be added by endorsement to the underlying policy.

If you are the party requesting COIs, create a standardized insurance requirements document that clearly specifies the coverage types, minimum limits, and endorsements you require. Provide this document to all contractors, tenants, and vendors so they know exactly what is expected. This prevents back-and-forth negotiations and delays.

Track COI expiration dates and request renewals proactively. Policies renew annually, and a COI that was valid when your contract started may have expired since then. Implement a system, whether a simple spreadsheet or a certificate management platform, to track expiration dates and request updated COIs before they lapse.

Verify the authenticity of COIs you receive. Unfortunately, fraudulent COIs exist, and accepting a fake certificate puts your business at risk. If you have any doubt about the authenticity of a COI, contact the issuing agent or carrier directly to verify the coverage. Look for signs of tampering such as inconsistent fonts, missing ACORD form numbers, or coverage limits that seem unusually high for the type of business.

CPK Insurance provides COI management services for our clients, including automatic renewal tracking, same-day COI issuance, and verification of incoming certificates from your contractors and vendors. Contact us to learn how we can simplify your COI management process.