Winning a contract, then hearing, “Well you can’t start until you show us that you have insurance.” Here’s where a Certificate of Insurance (COI) comes in handy.
A COI is a brief document that demonstrates you have in-force insurance, without having to provide your entire policy. Every day, businesses, contractors and freelancers use it to build trust and get work done.
What Is a Certificate of Insurance?
A certificate of insurance is a brief outline of your insurance coverage. It is provided by your insurance company or broker. Instead of showing a long policy document, you give them this proof that you have coverage in just one page.
A COI usually shows:
- Your business name (the insured)
- Types of coverage you carry
- Policy limits
- Start and end dates
- The name of the person or company requesting proof (the certificate holder)
The majority of certificates are filled out using the standard ACORD format, so they look familiar and are easy for clients to review and approve. Holding a COI does not give the client any insurance rights. It only shows that your insurance is in force.
Why a Certificate of Insurance Is Important
Clients do not want to take risks with uninsured businesses. A COI reassures them that if something goes wrong, insurance is in place. Many contracts require a COI before work can begin.
This is common for:
- Contractors bidding on projects
- Vendors working events
- Businesses leasing office or retail space
- Freelancers working with large companies
Some industries and government contracts require specific insurance limits. A COI confirms you meet those rules. For example, a homeowner may ask a roofing contractor to show a COI with $2 million in general liability before work starts.
Key Parts of a Certificate of Insurance
A COI follows a clear layout so clients can quickly find what they need.
It includes:
- Insurer information, showing who provides the coverage
- Policy numbers and issue date
- Coverage types and limits, such as general liability or workers’ compensation
- Effective and expiration dates, which must match the project timeline
- Insured and certificate holder names, spelled correctly
- Endorsements, such as additional insured status or waiver of subrogation
Workers’ compensation sections often reflect state-specific rules, such as statutory limits. Always compare the COI with contract requirements to avoid delays or rejection.
Types of Certificates of Insurance
Certificates can be issued for different types of insurance, depending on the situation.
The most common types include:
- General liability, for injury or property damage to others
- Workers’ compensation, for employee injuries (required in most states)
- Auto liability, for business vehicle use
- Professional liability, for errors or mistakes in services
Some industries need specialized certificates, such as builder’s risk for construction projects or pollution liability for environmental risks. Larger or federal projects may require higher limits.
| Type | Main Coverage | Common Users | Typical Limits |
| General Liability | Injury and property damage | Contractors, vendors | $1M–$2M |
| Workers’ Compensation | Employee injuries | Employers | Statutory |
| Auto Liability | Vehicle claims | Delivery, transport | $500K+ |
| Professional Liability | Service errors | Consultants | $1M |
Business Owner’s Policy (BOP) Insurance Explained in Simple way
How to Get a Certificate of Insurance
Getting a COI is usually quick and easy. Many insurers offer online portals where you can request one in minutes.
If you do not have online access, contact your insurance agent and provide:
- Certificate holder name
- Address
- Required coverage limits
- Any special endorsements
Before sending it, check that the names, dates, and limits match the contract. Most insurers provide COIs for free, though some may charge a small fee for special requests.
It is smart to request multiple copies for ongoing clients and track expiration dates so coverage never lapses.
Certificate of Insurance vs. Proof of Insurance
These terms are often confused, but they are not the same.
A certificate of insurance summarizes multiple coverages and is mainly used for contracts and business agreements.
A proof of insurance usually shows one specific policy, such as workers’ compensation or auto insurance, and is often used for legal or regulatory checks.
Using the wrong document can delay approvals, so always confirm which one is needed.
Common Uses for Certificates of Insurance
COIs are widely used across industries. Contractors use them to meet state and client requirements. Landlords require them from tenants. Event planners request them from vendors.
Freelancers, online sellers, and consultants may need COIs for partnerships or platform approvals. Banks may even ask for one during loan applications to confirm risk protection.
Common Certificate of Insurance Mistakes to Avoid
Small errors can stop work from moving forward.
The most common problems include:
- Incorrect coverage limits
- Missing endorsements
- Expired dates
- Misspelled names
- Altering standard certificate wording
Never change a COI yourself. Always request corrections from your insurer. Keeping records and using tracking tools helps avoid last-minute issues.
Legal Rules and State Differences
There is no federal law that governs certificates of insurance. States regulate them through insurance rules, and some approve specific formats. Contract terms usually matter more than state law.
If a contract requires certain limits or endorsements, failing to provide them can result in penalties or stopped work. Always review local and industry requirements carefully.
Using COI Templates Safely
Standard COI templates include insurer details, coverage types, limits, dates, and certificate holder information. Online tools can help with formatting, but only your insurer or agent can issue a valid COI. Creating your own certificate without approval can make it invalid.
Final Thoughts
One small document with considerable impact is this certificate of insurance. It demonstrates that your business is protected, establishes trust with clients and helps projects proceed smoothly.
Request it early, read it closely and be vigilant about expiration dates to keep in preparation for your next chance.
Frequently Asked Questions (FAQs)
What is a certificate of insurance used for?
It is used to prove that you have active insurance coverage for clients, contracts, or regulatory requirements without sharing your full policy details.
How much does a certificate of insurance cost?
Most insurers offer certificates free of charge. Some may charge a nominal fee, which is typically between $10 and $25, for special or extra requests.
Can a COI change my policy coverage?
No. A COI only summarizes your existing coverage. Any changes to coverage require official policy endorsements.
Who can request a certificate of insurance?
A COI can only be requested by the policyholder to the insurance company or broker. Clients cannot request it directly.
How long is a COI valid?
A COI is valid for as long as the underlying policy is active, which is usually one year. It should be monitored for expiration.
What is the difference between a COI and an insurance policy?
A COI is a brief snapshot of coverage, while the insurance policy is the full legal contract with detailed terms and conditions.
