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ACORD certificate of liability insurance

An ACORD certificate of liability insurance is a document that proves you have liability insurance coverage.

What is a certificate of liability insurance?

More specifically, an ACORD certificate of liability insurance – also known as an ACORD 25 form and a certificate of insurance (COI) – is a one-page document that proves you have business liability insurance coverage and can meet the conditions of contracts that require it.

As the certificate holder, it gives you proof of insurance that you can show to anyone you do business with to prove that your business is protected from common risks.

It’s issued as a matter of information by your insurance provider, and it summarizes the key elements of your policy or multiple policies, such as your types of coverage, policy numbers, policy limit (such as your per-occurrence limit and aggregate limit), the effective date, policy period, and expiration date of your coverage.

It may also have language pertaining to the terms, exclusions, and conditions of the policy, plus the insurance company’s phone number, the certificate number, a contact person, mailing address, and fax number.

The conditions of such policies depend on the type of insurance. Insurance companies provide certificates of liability insurance for a variety of small business insurance policies, including:

How does a business get a certificate of insurance?

Small business owners who purchase a policy with Insureon can access their certificate of insurance online or with a mobile device immediately after buying a policy.

If you don’t have a policy, simply complete Insureon’s easy online application. Our licensed insurance agents, who have worked with thousands of small businesses, can help you get the right insurance coverage at the best price, often on the same day that you contact us.

Protect your business and get a certificate of insurance today

Why do businesses need a certificate of liability insurance?

No business owner wants to get sued, especially if it’s because a vendor caused property damage or bodily injury. For this reason, companies want to know the firms they hire have their own liability insurance that would cover property damage or an injury.

For example, let’s say you own a carpentry firm. You recently received a verbal agreement to do a job for a general contractor who builds luxury homes.

However, before signing a contract, the contractor asks for a copy of your certificate of liability insurance. He requests it because he doesn’t want to be held liable if you or one of your employees damaged someone’s property or injured a third party while working at a construction site.

The COI you receive from your issuing insurer gives you proof of insurance and shows that you’re covered in case something goes wrong. Your certificate of liability insurance is your ticket to securing the contract.

What about additional insureds?

An additional insured is someone covered by someone else’s policy. The additional insured could be an individual employee, a group, or another business such as someone you contract with for services.

An endorsement for the additional insured would typically be added to your general liability coverage and give the additional insured protection against third-party claims and lawsuits.

If allowed by your insurance company, this offers a form of subrogation for your additional insureds, so the insurance company could represent them in court and assume their right to pursue an individual or company for compensation on a claim.

Adding an additional insured to any of your policies starts with yourself, as the named insured, checking your insurance contract or contacting your insurance company to see if this can be added to your policy and the type of insurance form required. If additional insureds are allowed within your policy provisions, be sure to get a copy of the endorsement.

What does a certificate of insurance include?

A certificate of insurance includes:

  • Your name and address
  • The name of your agent and insurance company
  • The start and end dates of your policy
  • The types of coverage you purchased
  • Your coverage limits
  • Your policy number

Download an example of an ACORD certificate of liability insurance.

When did the insurance industry first develop a standard COI?

For much of the twentieth century, insurance companies basically took their own unique approach to policy forms. However, this confused agents, brokers, and customers, while making life difficult for insurers.

To avoid this confusion, companies banded together in the 1970s to form the Association for Cooperative Operations Research and Development (ACORD). They authorized the ACORD corporation to develop standard forms that everyone involved in the insurance industry could use and were easier to read. This included an ACORD certificate of insurance.

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Updated: August 2, 2022
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