What is a Certificate of Insurance (COI)?
A certificate of insurance is a document used to provide information on specific insurance coverage. The certificate provides verification of the insurance and usually contains information on types and limits of coverage, insurance company, policy number, named insured, and the policies’ effective periods. Although the certificate should not be substituted for information contained in the actual insurance policies, it is usually a reliable source of information or proof of insurance coverage.
Certificates are usually requested by opposite parties in an agreement, contract, or transaction to make certain the other party has the appropriate insurance coverage.
A certificate of insurance provides proof to a third party that a vendor or other business has adequate insurance coverage. Many organizations need to limit their liability when hiring outside vendors or contractors, and a certificate of insurance helps them place liability for injuries or damages back onto the vendor.
Information Provided in COI; Certificates of insurance don’t just prove you have insurance. They also show what types of coverage you have and the coverage limits. If you are the only employee of your company, you may qualify as a vendor for an organization if you don’t have workers’ compensation coverage. However, if you add employees, you may need to add proof of workers’ compensation coverage to continue as a vendor. In addition, your coverage limits on items such as general liability and professional liability must meet the minimums required by the other business. Most certificates include effective dates of coverage, which means you should send new certificates when you renew or change your insurance.