What Is a Certificate of Insurance? [A Guide for 2024]


Even though certificates of insurance (COI) are popular nowadays among businesses, many are not sure about their purpose. What is a certificate of insurance? This article addresses the definition and purpose of a COI and when it’s required.

What Is a Certificate of Insurance?

A certificate of insurance (COI) is a document that contains the crucial details of an insurance policy in a standardized format, serving as proof of business insurance.

A COI is issued by a broker or an insurance company that serves to justify the existence of insurance under specific conditions granted to listed individuals. For instance, a standard COI lists the policy effective date, policy limits, policyholder’s name, the type of coverage, and other details.

A COI isn’t a formal contract between two parties but an informal document providing proof of insurance. And it doesn’t constitute a contract of insurance between the broker or the issuing insurance company and the certificate of the insurance holder.

NOTE: Obtaining a COI is free because it’s a complimentary service offered by the insurance company that sold you business insurance.

Types of Certificate of Insurance

There are typically three major types of COI.

Certificate of Liability Insurance

This type of insurance is a document that confirms you have business liability insurance coverage. It outlines the key elements of your policy and assures customers and prospects that your business is protected from common risks.

This type of COI should be examined to protect the project owner and extend additional insured status to the project manager. Reviewing the insurance certificate can be a serious risk component transfer from the project owner to a third-party vendor.

To ensure that the third parties’ insurance is suitable for you and enough to protect you, search for the following indications on the certificate of insurance:

  • Additional insured status extended to the correct entity names.
  • Waiver of subrogation.
  • Description of the operations the vendor is working on.
  • Coverage is primary and noncontributory.

For a more detailed review of these coverage details, you need to collect and review the insurance certificate for endorsements.

Certificate of Workers Compensation Insurance

For large projects in construction jobs, a general contractor or project management company is typically responsible for the overall realization of the project. But most companies accountable for this realization use vendors or contractors to achieve certain aspects of the work.

Most states in the US require a certificate of insurance for business, which maintains workers’ compensation insurance for employees. So project management companies or general contractors might require workers’ compensation insurance certificates from vendors and subcontractors working on the project. These certificates are necessary for protection from liability if a vendor or subcontractor employee is injured while working.

Certificate of Auto Liability Insurance

All drivers of owned, non-owned, leased, or hired vehicles should be checked for a certificate of auto liability insurance. Drivers are required to purchase auto insurance with liability insurance.

In some circumstances, a certificate of coverage insurance of a car can be requested by a bank/lender that financed the purchase of a vehicle. For instance, when financing a car, the lender may require full coverage insurance to maintain the car until the loan is paid off.

NOTE: Most in America have health insurance because of the high costs of healthcare. Health insurance protects them from owing lots of money to hospitals and doctors if they get hurt or sick.

What Is Included in a COI?

A certificate of insurance is explained in nine sections.

  • Disclaimer

A COI starts with a disclaimer to show that the document is for informational purposes. It’s simply a representation of your actual coverage levels and doesn’t extend or change your policies. The disclaimer goes on to say that a COI is not a contract.

  • Producer

Your insurance company is the producer of the COI. Therefore, the name of your insurance provider is included, as well as the name and address of your insurance company.

  • Insured

With a certificate of insurance for business or a contractor, you’re the insured. So you should include your business’s legal name and address. But if you include other companies or subcontractors on your insurance policy (temporarily), they’ll be listed as Additional Insured in another section of the document.

  • Insurers Affording Coverage

The coverage of your business insurance is probably composed of a combination of policies that give complete coverage. This section lists all of the insurance companies under which you’ve policies.

  • Coverages

When you make a request for a certificate of insurance, you need to know that the coverage section of your COI is the longest and explains the types of insurance you have. These are separated into seven subsections:

  1. INSR LTR (Insurer letter)
  2. Type of Insurance
  3. ADD’L INSRD (Additional Insured)
  4. SUBR WVD (Subrogation Waived)
  5. Policy Number
  6. Effective Dates
  7. Limits
  • Description of Operations

This section explains detailed information about the job or project the COI was issued for. Locations, project numbers, and other specific operations are included in it. And if the columns are marked, it lists the details of subrogation waivers and additional insureds.

  • Certificate Holder

This section lists the name and address of the certificate holder insurance. The certificate holder is the business or individual requesting the certificate—your client, company, or organization.

  • Policy Cancellations

If the policy is canceled earlier than the expiration date, the certificate holder will be notified. The number of days before the cancellation (usually 30) is listed in this section.

  • Authorized Representative

In the final section, the document is authorized with the signature of the insurance agent.

Key Takeaways

A certificate of insurance (COI) is a document that contains the crucial details of an insurance policy in a standardized format and serves as proof of business insurance.
A COI isn’t a formal contract between two parties but an informal document providing proof of insurance.
The three major types of COI include Certificate of Liability Insurance, Certificate of Workers Compensation Insurance, and Certificate of Auto Liability Insurance.
The nine sections in the COI include Disclaimer, Producer, Insured, Insurers Affording Coverage, Coverages, Description of Operations, Certificate Holder, Cancellation, and Authorized Representative.

Importance of a COI

Certificates of insurance and the certificate of insurance requirements are essential for you and your partners and customers. It will be much easier to enter into a partnership and develop your business when you have insurance and provide proof of it.

Nowadays, there aren’t many customers or companies willing to work or collaborate with a company that isn’t insured. Therefore, your business’s success relies on obtaining a COI when you need it.

NOTE: According to LIMRA’s 2020 Insurance Barometer Study, 54% of all Americans were covered by life insurance in 2020.

How to Get a Certificate of Insurance

Suppose a potential client requests proof of insurance. In this case, they typically expect you to provide a COI, which could be an excellent opportunity to ask your client about their expectations, including limits of coverage.

Once you understand what your clients expect from your insurance, you can call your agent and make a request for a certificate of insurance. You should also ensure if those pieces of information that your client wants are already included in your policy or need an extension or addition. Typically, the clients who request a COI wish to minimize potential problems in the future.

When you have the necessary coverage, the agent will create and deliver your COI.


It’s essential to obtain a COI to show proof of business insurance, benefiting your business and potential clients. Make sure to double-check all the necessary information and concerns to avoid unpleasant situations.


How much does a certificate of insurance cost?

It doesn’t cost anything. A COI provides proof of insurance coverage that you’ve already purchased. If you don’t have adequate coverage, you can buy additional policies to satisfy your client’s needs.

How to read a certificate of insurance?

First, make sure the business name is the same as the vendor you’re hiring. Next, check the policy expiration date and if the company has general liability insurance and workers’ comprehension insurance. And make sure that the vendor’s liability limits meet the limits on your insurance.

How to get a certificate of insurance for an event?

The question, what is a certificate of insurance, should also cover events. Contact your insurance provider and explain what you need and the minimum coverage amount for that event. The agent will check if your policy meets those requirements or if you need to buy a rider to increase coverage for the event.

What type of information is not included in a certificate of insurance?

The company’s cost for monthly premiums isn’t included in the COI or the identification card, which would show personal info to ID them.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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