Certificate of Insurance, Explained: What Is It, and Why Do Clients Ask for It?
Have you ever rushed to Google after a client requested that you “send your COI” because you were a little confused? This is a standard request and no reason for panic, but understanding what it is and why it’s important can help you build trust, reduce risk, and keep your business running smoothly.
What Is a Certificate of Insurance?
A Certificate of Insurance (COI) is an official document that summarizes an entity’s insurance coverage and policies.
Details include:
- The name and contact information of the entity policyholder or certificate holder.
- The name and contact information of the insurance provider.
- The types of coverage, such as general liability, workers’ compensation, auto, and professional liability.
- The policy number, monetary limit, and effective and expiration dates for each insurance policy.
- The name and contact information of the entity requesting the COI.
A COI is issued by an insurance company, typically using a standardized industry document called an Association for Cooperative Operations Research and Development (ACORD) form.
A COI is not an insurance policy, and it doesn’t guarantee payment if something bad happens. It simply provides proof of coverage.
Why Do Clients Ask for a COI?
Clients, as well as contractors and partners, typically request a COI to verify insurance coverage, ensure that it meets their minimum insurance requirements, and reduce their own liability exposure. Depending on the organization and industry, a COI could be a contract, legal, or compliance requirement.
Some clients will also ask to be listed as “additional insured” on the COI, which means you add them to your policy to provide them with coverage for the work you do for them.
Put yourself in the place of a client. Suppose you’re providing a service, something goes wrong, and your company is at fault. If the client doesn’t have a COI to verify that you have active, legitimate insurance, they could be liable for damages.
Simple But Important
A COI request is standard operating procedure in many industries. It’s a simple document, typically one page, and it can often be generated in one day.
But a COI carries a lot of weight because it protects your client and reduces risk. This builds and maintains trust in the relationship and allows both sides to focus on delivering a positive outcome.
If you have questions about COIs, what information to provide, and what information to look for, contact Stanton Insurance Group today.
