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About The Certificate of Insurance (COI)

Preamble

Please note that this content is independent of any content coming from insurance brokers or insurers or law firms. Keep in mind that commercial insurance is rarely taught in schools, and when it is, it’s mostly done through the lens of brokers or insurers. There are many misconceptions around Certificates of Insurance, like many other topics in commercial insurance, due to bad habits acquired through over reliance on insurance brokers or insurers or information providers who are lobbied by them. It is also important to note that insurance has both an operational aspect and a legal aspect, on which we put weights of 95% and 5% respectively in terms of importance to protecting a business and its investors (the point is that going to court to enforce coverage defeats the purpose of buying insurance, so you want to make sure that whatever insurance you buy protects your business right and pays out fast on large losses).

What Is Certificate Of Insurance

It is a document serving as evidence that insurance is in place for a particular insured. It is also known as COI and can be issued by insurance brokers, insurance companies, and/or risk management consultants. Please note that a COI cannot be relied on to analyze or interpret the actual technical insurance coverage provided by the insurance in question (for that, the actual insurance policies need to be analyzed word by word by risk managers who are independent of any insurance broker or insurer).

Certificate Of Insurance Coverage

Since a Certificate of Insurance is simply evidence that insurance coverage is in place, it does not provide coverage itself. That said, it can be issued to show evidence of any form of insurance coverage whether relating to property, general liability, or any other form of commercial insurance (there are numerous commercial insurance products).

How To Get Certificate Of Insurance

If you already buy insurance on which a certificate is needed, you can simply request it from your insurance broker, insurer, or risk management consultant. If you do not buy insurance on which a certificate is needed, you must first buy the insurance.

Contractor Certificate Of Insurance 

There is no mandatory template for a certificate of insurance (COI) to be used for contractors. A contractor who buys insurance can simply request a COI from their broker, insurer, or risk manager. The same applies to a certificate of insurance for subcontractors.

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Example Of Certificate Of Insurance

Here is an example of how a certificate of insurance looks like.

Sample Certificate of Insurance
Sample Certificate of Insurance

Certificate Of Insurance Holder

The holder of the certificate of insurance (COI) is the individual or organization that has asked you for that COI. While multiple holders can be outlined on a single COI, it is recommended to issue different certificates of insurance for holders who are not related to one another.

Certificate Of Insurance Additional Insured

You can add the holder of the certificate of insurance (COI) as an additional insured onto your insurance. This means that the coverage of the insurance policy you had bought, and that is evidenced by the COI, will be amended to extend to the individual or organization you add as an additional insured. This is typically done on liability insurance products. Simply request it from your broker, insurer, or risk manager.

Certificate Of Insurance Loss Payee 

Just as outlined above in Certificate Of Insurance Additional Insured, you can add an individual or organization as a loss payee to your COI, which means that the certificate of insurance holder who is the loss payee will be insured for their interest in your property (ex. mortgage lender, landlord, etc.). This is typically done on property insurance and other first party insurance products such as fidelity insurance as well as specific sections of cyber insurance.

Certificate Of Insurance Management

If you outsource the management of your insurance or employ risk experts for such job (ex. a risk manager assists you with buying or triggering the insurance sold by brokers), you can ask the person or organization managing your insurance to issue a certificate providing evidence of such.

Certificate Of Insurance Liability

 Answer to this search is twofold:

(1) a certificate of insurance (COI) can be issued on liability insurance that you purchase (ex. general liability, D&O liability insurance, etc.);

(2) a COI does present liability to you as well as the entity issuing it (broker, insurer, or risk manager) if it does not accurately represent the insurance that is in force. It is therefore recommended you review all certificates of insurance carefully.

Request For Certificate Of Insurance

Simply send a request to your broker, insurer, or risk manager in case a certificate of insurance (COI) needs to be issued on insurance you currently purchase. If you are looking to purchase new insurance, on which a COI is required, feel free to contact us.

Certificate Of Insurance Business 

A certificate of insurance (COI) can be issued to a business that buys any form of commercial insurance. A request for the certificate of insurance must be made as outlined above.

Small Business Certificate Of Insurance

Any small business regardless of industry or geography can request to have a certificate of insurance issued as evidence of their existing insurance. Please refer to the above sections.

Certificate Of Insurance Form

There is no one standard form or template for certificates of insurance (COIs) that is used by all brokers, insurers, and risk managers. In general, a COI will contain the following information:

·     Name and address of the Certificate of Insurance Holder;

·     Name and address of the insured individual or organization;

·     List of insurance policies bought or requested by the Certificate of Insurance Holder including names of the insurers, policy numbers, effective and expiry dates, limits of liability, and deductibles;

·     Additional information such as having an additional insured or a loss payee outlined on the certificate of insurance;

·     A notice of cancellation provision outlining terms of how the Certificate of Insurance Holder is notified if or when an insurance policy listed on the COI is cancelled;

·     A signature field by the issuer of the COI.

Verify Certificate Of Insurance

A certificate of insurance (COI) that is issued can be verified by calling or emailing the broker, insurer, or risk manager who issued such COI. Make sure the issuer is a legal and licensed entity. However, it is important to note that a COI cannot be relied on to analyze or interpret the actual technical insurance coverage provided by the list of insurance policies that are outlined within the COI (for that, the actual insurance policies need to be read word by word).

Certificate Of Insurance Event

You can get a COI for a specific event if you buy insurance for that event regardless of whether the event is recurring or not. First, buy the insurance for your event. Then, simply ask your broker, insurer, or risk manager to issue a certificate of insurance for the event.

Certificate Of Insurance Movers

You can get a COI if you are contracted to move or transport content. The COI can be for a specific move you make or one that evidences year-round insurance related to your operations.

Frequently Asked Questions (FAQ)

How To Read Certificate Of Insurance?

A certificate of insurance (COI) should a be a 1 pager that is simple to read and understand. If it is not, then ask your broker, insurer, or risk manager for a different format. Referencing the section above ‘Certificate of Insurance Form’, scan the areas of the document that outline the names and addresses of the Certificate Holder and the Insured and make sure those are correct. If either the Certificate Holder or the Insured constitute several individuals or entities then make sure such names are outlined accordingly. After that, go through the list of insurance policies outlined and make sure related information that is shown on the COI is correct. Finally, scan any additional requests and/or cancellation notice provisions outlined to ensure you have complied with any COI requests accordingly.

Who Can Issue A Certificate Of Insurance?

An insurance broker, insurance company, or risk manager who are licensed to act as such.  

How Much Does Certificate Of Insurance Cost?

Nothing, it’s free of charge. Beware of any issuer asking money to issue a certificate of insurance.

How Do I Get A Certificate Of Insurance? 

Simply ask your broker, insurer, or risk manager. But first, you will need to buy the relevant insurance.

Is A Certificate Of Insurance The Same As A Declaration Page?

No, it is not. A declaration page is a broad summary of a specific insurance policy’s coverage and terms. A certificate of insurance is simply evidence that such insurance policy exists.

Who Needs A Certificate Of Insurance?

Any person or entity requested to provide proof of their existing insurance or proof of specific insurance that they are required to have as part of their business or professional dealings.

What Is Certificate Of Insurance Used For?

As evidence that relevant insurance is in place and/or as required by business partners such as landlords, lenders, investors, etc. who derive peace of mind knowing that you are insured accordingly.

What Is A Certificate Of Insurance For Vendors?

Please refer to the section above named What Is Certificate Of Insurance. There is no mandatory template for a certificate of insurance (COI) to be used for vendors. A vendor who buys insurance can simply request a COI from their broker, insurer, or risk manager.

Which Vendors Need A Certificate Of Insurance?

Any vendor that is requested to provide evidence of their existing and/or required insurance by their customers, suppliers, regulators, landlords, lenders, investors, or others.

How To Request A Certificate Of Insurance From A Vendor? 

It is best to include your request within the contract you sign with such vendor. Depending on your size and your industry, such request would be part of a broader insurance provision which would need to be formulated by a risk manager independent of any insurance broker or insurer. Our team is ready to assist you in this regard.

What Does A Certificate Of Insurance Include?

The names and addresses of the certificate holder and insured, as well as a list of insurance policies carried by the insured, and other information. Please refer to the section above named Certificate of Insurance Form for more details.

Who Should Be The Certificate Holder On A Certificate Of Insurance? 

The person or entity directly requesting the certificate of insurance. In the case of sub-contractors, this could include the person or entity overseeing those who contracted them.

What Is A 30 Day Notice Of Cancellation Endorsement?

It is coverage that provides notification to an insured, a certificate of insurance holder, or other party requesting to be notified, upon cancellation of the insurance policy in force before the expiration date thereof by either the insured or the insurer, and within 30 days of such cancellation.

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