What is a Certificate of Insurance?

COIs prove insurance coverage in small business transactions.
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Renata Balasco

Senior Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist.…

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Kristine Lee

Insurance Analyst

  • Licensed Insurance Agent — Property and Casualty
  • 4+ years of Experience in the Insurance Industry

Kristine is a licensed insurance agent who joined The Zebra in 2019 as an in-house content researcher and writer. Before joining The Zebra, she was a…

What is a certificate of insurance?

A certificate of insurance, or COI, is most commonly associated with small business insurance and often refers to liability coverage. This document acts as proof of insurance coverage and is issued when you buy a small business liability insurance policy. In the following sections, we will outline when you need it, what it covers and other details.

Key takeaways
  • A certificate of insurance verifies the existence of an insurance policy and is issued by the insurance company.
  • COIs are most frequently associated with small business insurance.
  • Clients of small businesses often request certificates of insurance as part of a contract or business agreement.

What does a certificate of insurance look like?

A COI verifies the existence of an insurance policy, and the document itself contains all the standard information often included on a declaration page or insurance binder. A standard COI will list the policyholder’s name, effective dates, coverages, policy limits and key details.

Click here to see a certificate of insurance sample.

When do you need a COI?

Certificates of insurance are used most often in small business transactions and provide proof to the client or customer that the business is insured. This is particularly important where liability or significant losses are of concern, making COIs synonymous with certificates of liability insurance. COIs come up most frequently in the following situations:

You need to attract new customers

Even if you’re just starting out in your new business, having insurance tells your potential customers that you have the financial backing to cover losses if they occur. This increases your dependability and heightens your reputation, making customers more likely to feel safe doing business with you.

You need to sign a client contract

Whether you are working with a partner business or doing work for a customer, contracts are essential. Clients may request a COI in the terms of the contract. An insurance policy protects you and your clients against potential losses, so it’s never a bad idea to hold one.

You work as a contractor

If a business hires you as a contractor, they want to know that they will not be held responsible should a loss occur due to contractor mistakes. With liability insurance, losses are typically covered and don’t need to involve the hiring company.

You need to sign a commercial lease

Just like with homeowners insurance and in some cases, renters insurance, lessees are required to hold certain levels of insurance in order to be granted a lease for a commercial property. Your COI will serve as sufficient evidence of insurance when signing a lease.

What does the COI say is covered? 

Certificates of insurance for small businesses typically contain sections for different types of liability insurance. Usually, these are listed as general liability insurance, commercial auto insurance, umbrella insurance and workers’ compensation. It covers the “insured” — a person, the name of the business or the additional insureds. 

The general liability section lists the coverages and their limits: premises and operations exposure, products and completed operations exposure and indirect/contingent exposure. Auto liability covers bodily injury and property damage. The umbrella section provides excess coverage and the workers' compensation section includes limits for each accident and/or disease.

It’s also important to note what a liability policy doesn’t cover, but these sections can be covered by other types of insurance. Liability insurance won't cover damage to your own business property or if your business must temporarily close due to events like storms or fires. These are covered by commercial property insurance and business interruption insurance, respectively.

Other considerations of COIs

When a client requests a certificate of insurance, they become a certificate holder. There is a special section on each COI that contains the client’s name and contact information, as well as statements showing the insurer’s obligation to notify the client of any policy cancellations.

All insurers involved in the small business will be listed on the certificate if there is more than one. The general liability section will indicate whether coverage applies on a per-claim or per-occurrence basis. While workers’ compensation is mentioned on the COI, each state has its own laws determining limits. On a standard COI, the section for workers’ compensation will show no limit.

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Frequently asked questions

A good rule of thumb is that any business that provides a service or performs work with a possibility for liability losses should have a COI. You should have a COI ready whenever you sign a new client, property lease or work as a contractor. Your insurance company will issue you one at the start of the policy and you can fill out the coverage details yourself with the appropriate information.

It’s recommended that customers of small businesses request a COI when entering into a contract with a small business where issues of liability may arise. COIs are free and a good way to verify insurance coverage from a business or contractor.

A certificate of insurance is merely proof that you hold an insurance policy. An insurance policy operates like a legal contract that defines your coverage for the risk you pose. A COI is not a legally binding contract, though it is often included within business contracts to provide evidence of coverage.

A certificate of insurance is usually an ACORD 25 form. You can obtain this document by logging on to your insurance provider’s website and requesting one or calling your agent to have one sent over. You may need to provide your policy number and other details of the job to verify that the form is properly tailored to the job you’re doing.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.