Certificates of Insurance (COIs): What They Are and Why Your Business Might Need One

If you own a business, you've probably been asked to provide a Certificate of Insurance, often called a COI. Whether you're signing a contract, working on a job site, renting a space, a piece of equipment, or participating in an event, a COI is one of the most commonly requested insurance documents.

If you've ever wondered what a Certificate of Insurance is or why someone is asking for it, you're not alone. Here's what every business owner should know.

What Is a Certificate of Insurance?

A Certificate of Insurance is a document that provides a snapshot of your current insurance coverage at the time it is created. It confirms that your policy is active and outlines important details such as:

• The name of the insured business

• The insurance company providing coverage

• The types of coverage you carry

• Your policy limits

• Your policy's effective and expiration dates

  
  

Think of it as proof that your business has the insurance coverage required for a particular job, contract, or agreement.

It's important to note that a Certificate of Insurance is not an insurance policy. It does not change your coverage or provide any additional protection. It simply summarizes the coverage you already have.

Why Would Someone Ask for a COI?

Many businesses and organizations want to verify that the companies they work with carry adequate insurance before allowing work to begin.

You may be asked to provide a Certificate of Insurance if you are:

• Working as a contractor or subcontractor

• Leasing commercial space

• Performing work on someone else's property

• Participating in a festival, fair, or community event

• Signing a contract with a new client

In these situations, the party requesting the certificate wants reassurance that your business carries the appropriate insurance coverage should something unexpected happen.

What Information Is Included?

While every certificate looks similar, the information it contains is specific to your business and your insurance policies.

A Certificate of Insurance may include:

• General Liability Insurance

• Commercial Auto Insurance

• Workers' Compensation Insurance

• Umbrella or Excess Liability Insurance

• Commercial Property Insurance

Depending on the request, additional information may also be included if needed.

Does a COI Change My Coverage?

No. A Certificate of Insurance does not create, expand, or modify your insurance coverage. It is simply documentation that shows the insurance you already have in place.

If a contract requires coverage that your current policy does not provide, your insurance coverage would need to be reviewed before a certificate could accurately reflect those requirements.

What If Someone Wants to Be Added as an Additional Insured?

Sometimes, the company requesting a Certificate of Insurance may also ask to be listed as an Additional Insured.

Being listed as an Additional Insured is different from simply receiving a certificate. It is a change made to your policy when appropriate, usually for an additional premium, that may provide certain liability protections to another party based on the terms of your policy and the agreement between you.

Not every request requires Additional Insured status, and not every policy automatically includes it. If you're unsure what's being requested, we're happy to help explain the difference.

Pro tip: If this is for a bid contract, let your agent know! It's handled differently than a typical request.

Need a Certificate of Insurance?

One of the benefits of working with an independent insurance agency is having someone to help when these requests come up.

If you need a Certificate of Insurance, our Commercial Lines team can help make sure it's issued accurately and sent to the right party. If you receive a contract and aren't sure what it's asking for, we're happy to review it with you and answer your questions.

Insurance paperwork can sometimes feel overwhelming, but understanding what a Certificate of Insurance does and does not do can help make the process much easier.

At Tapley Insurance, we're here to help you protect your business and make insurance a little easier to understand.

(207) 363-7894 | www.tapleyagency.com | 300 York St. PO Box 808 | York, Maine 03909