Nowadays the document that plays a pivotal role in both business and personal transactions is a certificate of insurance. It is generally used as proof of insurance coverage and it is usually requested by clients, vendors, or landlords to verify policyholder’s protection.
In this article, we will explore and get a complete understanding of the certificate of insurance. And also their purpose, types, key elements, and why it is important.
What is a Certificate of Insurance?
A certificate of insurance (COI) is a document issued by an insurance company that summarizes an insurance policy’s key details. It confirms that the policyholder has active coverage, outlining the type of insurance, coverage limits, policy number, and expiration date. The COI acts as evidence that an individual or business carries the necessary insurance without requiring access to the full policy.
Why is a Certificate of Insurance Important?

Businesses and individuals often require a certificate of insurance to minimize risks when working with contractors, service providers, or tenants. Here’s why this document is essential:
- Risk Management – Ensures that business partners or vendors have adequate insurance to cover potential damages or liabilities.
- Legal and Contractual Compliance – Many contracts require a COI as proof of coverage before work begins.
- Trust and Credibility – Having a COI reassures clients, landlords, or partners that you are financially protected.
- Quick Proof of Insurance – Instead of sharing a complete insurance policy, a COI provides a snapshot of relevant coverage details.
Types of Certificates of Insurance
COIs vary based on the type of insurance coverage they verify. The most common types include:
1. General Liability Insurance COI
This document proves that a business has general liability insurance, covering bodily injuries, property damage, and legal expenses. It is commonly required by clients before entering into contracts.
2. Commercial Property Insurance COI
This certificate verifies insurance coverage for business properties, including buildings, equipment, and inventory. Landlords often request this document before leasing commercial spaces.
3. Workers’ Compensation Insurance COI
Employers provide this COI to prove that they have workers’ compensation insurance, which covers medical expenses and lost wages for employees injured on the job.
4. Professional Liability Insurance COI
Also known as errors and omissions (E&O) insurance, this COI is required for professionals like doctors, lawyers, and consultants. It covers claims of negligence, errors, or omissions in services provided.
5. Auto Liability Insurance COI
This document verifies that a business or individual has commercial auto insurance, covering accidents and damages related to business-owned vehicles.
Key Components of a Certificate of Insurance
A certificate of insurance contains essential information about the policyholder’s coverage. Here are the key details typically found in a COI:
- Policyholder’s Name and Contact Information – Identifies the insured party.
- Insurance Provider’s Details – Lists the insurance company’s name and contact information.
- Policy Number – A unique identifier for the insurance policy.
- Effective and Expiration Dates – Specifies the start and end dates of the policy.
- Types of Coverage – Outlines the insurance policies included, such as general liability, property, or workers’ compensation.
- Coverage Limits – Specifies the maximum amount the insurer will pay for claims.
- Additional Insureds – Lists any third parties covered under the policy, such as contractors or clients.
Who Needs a Certificate of Insurance?

A certificate of insurance is essential for various businesses and professionals, including:
- Contractors and Subcontractors – To prove they have liability coverage before starting a project.
- Freelancers and Consultants – To demonstrate professional liability insurance to clients.
- Small Business Owners – To show proof of property, liability, or workers’ compensation insurance.
- Landlords and Tenants – Landlords often require tenants to have renters’ insurance before leasing a property.
- Event Planners and Vendors – To ensure coverage for potential liabilities during events.
How to Obtain a Certificate of Insurance?
If you need a certificate of insurance, follow these steps:
- Contact Your Insurance Provider – Request a COI from your insurer or agent.
- Specify Coverage Details – Ensure the document includes all required coverage and policy details.
- Provide the Requestor’s Information – If another party needs to be listed as an additional insured, inform your insurer.
- Review for Accuracy – Double-check policy numbers, coverage amounts, and expiration dates.
- Send to the Requestor – Provide the COI to the client, landlord, or contractor requesting proof of insurance.
Common Mistakes to Avoid with Certificates of Insurance

While COIs are straightforward, mistakes can lead to issues. Avoid these common errors:
- Providing an Expired COI – Always ensure your insurance policy is active and up to date.
- Failing to List Additional Insureds – If required, ensure the requesting party is listed on the COI.
- Not Verifying Coverage Details – Ensure the COI matches the coverage needed for your contract or lease agreement.
- Assuming a COI Guarantees Coverage – A COI is proof of insurance but does not guarantee claim approval; always review the full policy for details.
Conclusion
For businesses, contractors, and professionals a certificate of insurance serves as an essential document. It is given as proof of coverage to make sure that in business relationships there is compliance of contractors and fostering of trust. Regardless if you are a business owner, a freelancer, or a contractor giving and managing the COIs will protect you from any financial or legal risks. It is important to recheck and verify insurance details and offer accurate COIs to retain credibility and compliance in your industry.