What Is an Insurance Certificate (COI)?
A client is ready to hire your business. The project is approved, the contract is nearly signed, and everything appears to be moving forward.
Then you receive a simple request:
"Please send us a Certificate of Insurance."
Many small business owners encounter this request for the first time and have no idea what it means.
A Certificate of Insurance, often called a COI, is one of the most common documents used in the business insurance world. Understanding what it is and why companies request it can help you avoid delays and appear more professional when working with clients.
What Is an Insurance Certificate (COI)?
A Certificate of Insurance (COI) is a document that summarizes your business insurance coverage.
It provides proof that your business has active insurance policies and outlines important details such as:
- Insurance company name
- Policy numbers
- Coverage types
- Coverage limits
- Policy effective dates
- Policy expiration dates
A COI is not an insurance policy itself. Instead, it serves as evidence that coverage exists.
Why Do Clients Ask for a COI?
When another company hires your business, they want to reduce their own risk.
If your employee damages property, causes an injury, or creates another covered loss, the client wants reassurance that insurance may help cover the claim.
Requesting a COI allows them to verify that your business carries the appropriate coverage before work begins.
This is especially common in industries such as:
- Construction
- Cleaning services
- Landscaping
- Consulting
- IT services
- Transportation
- Property management
What Information Appears on a COI?
Although formats may vary slightly, most certificates contain the same basic information.
| Section | Purpose |
|---|---|
| Insured Business | Identifies the company that owns the policy |
| Insurance Carrier | Shows the insurance company providing coverage |
| Coverage Types | Lists active insurance policies |
| Coverage Limits | Displays maximum coverage amounts |
| Policy Dates | Shows when coverage begins and ends |
| Certificate Holder | Identifies the party requesting the certificate |
What Types of Insurance Can Appear on a COI?
A COI may include several different types of business insurance.
Common examples include:
- General Liability Insurance
- Professional Liability Insurance
- Workers' Compensation Insurance
- Commercial Auto Insurance
- Cyber Liability Insurance
- Umbrella Insurance
If you're unfamiliar with liability coverage, see our guide on What Does General Liability Insurance Actually Cover?.
Example
Example:
A landscaping company wins a $20,000 maintenance contract for a commercial property.
Before allowing the company to begin work, the property manager requests a Certificate of Insurance.
The landscaping company contacts its insurance agent and obtains a COI showing:
- $1 million General Liability coverage
- Active Workers' Compensation coverage
- Current policy dates
After reviewing the certificate, the property manager approves the contractor and work begins.
Is a COI Required by Law?
In most situations, no.
There is generally no law requiring every business to carry a Certificate of Insurance.
However, many contracts require proof of insurance before work can begin.
Without a COI, you may lose projects, contracts, or business opportunities.
How Do You Get a Certificate of Insurance?
Obtaining a COI is usually simple.
Most businesses can request one directly from:
- Their insurance agent
- Their insurance broker
- Their insurance company
Many insurers now allow policyholders to download certificates online within minutes.
What Happens If You Don't Have a COI?
The consequences vary depending on the situation.
Some clients may simply refuse to hire your business.
Others may delay projects until proof of coverage is provided.
For contractors and service providers, failing to provide a COI can result in lost revenue and damaged credibility.
COI vs Insurance Policy
| Certificate of Insurance | Insurance Policy |
|---|---|
| Summary document | Full legal contract |
| Proof of coverage | Contains complete policy terms |
| Typically one page | Can contain dozens of pages |
| Used for verification | Used to determine actual coverage |
When Do Small Businesses Need a COI?
You may need a Certificate of Insurance if you:
- Work with commercial clients
- Bid on contracts
- Lease office space
- Perform work on client property
- Hire subcontractors
- Provide professional services
As a business grows, requests for COIs become increasingly common.
Frequently Asked Questions
Does a COI provide insurance coverage?
No. A COI only proves that insurance coverage exists.
How much does a Certificate of Insurance cost?
Many insurance companies provide certificates at no additional charge to policyholders.
Can a client verify a COI?
Yes. A client can contact the insurance carrier or agent listed on the certificate to verify coverage.
Can I create my own COI?
No. Certificates should be issued by an insurance company, broker, or authorized insurance representative.
Final Thoughts
A Certificate of Insurance may seem like a small piece of paperwork, but it plays an important role in business relationships.
It helps clients verify that your business carries the insurance coverage needed to handle potential risks and liabilities.
For many small businesses, having a COI readily available can make the difference between winning a contract and losing an opportunity.
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