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What Is A Certificate of Insurance?

What Is A Certificate of Insurance (COI)?


A Certificate of Insurance, otherwise known as a COI, is a document obtained by your insurance company or insurance agency as proof a company has a valid business insurance policy and carries sufficient coverage. A COI is an Acord form and either a PDF or a physical certificate.  The Certificate of Insurance is similar to an auto ID card or evidence of insurance for a homeowners policy.


A client can request a COI to prove the company they have hired has a valid business insurance policy if something goes wrong on the job and the company doing the work has existing insurance coverage.


How To Get A Certificate of Insurance (COI)


Typically you need to contact your insurance agency or broker to obtain a certificate of insurance. They will take the necessary information to draft the certificate of insurance, such as coverage limits and requirements. If an additional insured must be to the policy, you will also need to provide their information.


This process can take days in the past with some insurance companies and traditional agencies. The Overmyer Insurance Agency utilizes technology and our partnership with the insurance companies we represent to be much more responsive and get your Certificate of Insurance sooner.  


Who Needs A Certificate of Insurance


If the work you do can cause loss or damage to someone else, you will need a Certificate of Insurance as part of the hiring or bidding process.


Here are some examples of when a Certificate of Insurance is required:


  • A general contractor would like to bid on a new building being constructed. As a part of the bidding process, a Certificate of Insurance is required to prove their insurance policy will cover any damage caused by the construction company.

  • A restaurant is hired to cater an event. A Certificate of Insurance may be required to confirm you carry the appropriate coverage. 

  • A shop that rents the space from a landlord may be required to submit a Certificate of Insurance to prove they have insurance coverage for slips and falls.  

How To Read A Certificate of Insurance

A certificate of insurance is on a standardized form called an Acord form used by the insurance industry and it is broken up into different sections:

  • The Date  This is the date the Certificate of Insurance was issued from the insurance agency or company.

  • Disclaimer: Legal wording associated with the Acord form that confirms the form is for information only and is not an actual insurance policy.

  • Producer:  The insurance agency or company issuing the Certificate of Insurance

  • Insured: The name of the business insured under the commercial insurance policy.

  • Insurers Affording Coverage:  The name and address of the insurance company providing the commercial insurance coverage.

  • Coverages:  An outline of the commercial insurance coverage on the policy.  The coverage outline includes the general liability limits, automobile liability limits (for a commercial auto policy), and workers compensation coverage limits.

  • Descriptions of Operations: A description of the business operations, location, or vehicles.  This can be used to include additional information that may be required about the business insured on the commercial insurance policy.

  • Certificate Holder:  This section includes the additional insured name and address.

  • Cancellation: A notice that the additional insured or certificate holder will be notified if the insured cancels the policy.

  • Signature: Signature of the insurance agent or broker issuing the certificate of insurance.

Why Is A Certificate of Insurance Important?


A Certificate of Insurance proves the company you hire to do a job or provide a service has a current insurance policy and carries sufficient coverage to cover them should they cause damage or injury.

What Is A COI In Construction?

The COI, or certificate of insurance, is typically required by the owner of the construction project as a way to protect themselves against any potential losses or damages that may occur during the course of the project. It also serves as a way for the owner to verify that the contractor has the necessary insurance coverage in place to protect themselves, their employees, and the project itself.

What Is An Additional Insured?


Businesses that request a Certificate of Insurance may request they be added as an Additional Insured on the COI. Then, if anything goes wrong, they will be able to file a claim directly with the insurance company.


For instance, you would like to hire a painter to paint your office. Unfortunately, the painter caused damage to the flooring and ran off. Since you are listed as Additional Insured on the Certificate of Insurance, you can file a claim directly with the painting company's insurance company.


A landlord may require they be listed as additional insured on the certificate of insurance for a shop that rents their space. Should someone slip or fall in the shop and be injured, the landlord will have proof the shop carries sufficient coverage against this risk.


How Much Does A Certificate of Insurance Cost?


$0! Obtaining a Certificate of Insurance from your insurance company or agency should cost nothing. If you are being charged for this document, it’s time to look for a new insurance company or agency.


Bottom Line:


A Certificate of Insurance is a free document that protects both the business's and the client's interests. It’s essential to quickly provide proof of coverage whenever you submit a bid for a job or if you are a customer to ensure the business your hire carries sufficient insurance coverage.

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