What is a certificate of insurance?

A client may request a certificate of insurance in the terms of a contract. It shows clients you have an effective risk management plan in the event of a lawsuit, which may give them financial protection against losses and damages.

Example: A computer repair business has a long-term contract with a local company. If a technician accidentally drops a client’s laptop during a repair, the computer repair company’s general liability policy covers the cost of replacing the broken laptop.

You may need a certificate of liability insurance to sign a lease for a new office, storefront, or other commercial space.

Example: Your accounting firm recently purchased commercial general liability insurance to fulfill the terms of its new commercial lease. A client trips on your new office’s front steps and sues to recoup medical bills from their bodily injury. This type of insurance policy protects you and your landlord from the costs of the lawsuit.

Businesses that hire contractors and subcontractors often want reassurance they will not be held responsible if someone working for them make a mistake. If the contractor has liability insurance, financial losses or damages that occur as a result of the contractor’s work are typically covered – without involving the business that hired the contractor.

Example: A construction company hires a contractor to install windows in an office. The completed windows don’t match the specifications outlined in the contract, resulting in thousands of dollars of overages. If the construction company required the contractor to obtain liability coverage, the cost of replacing the windows would be covered.

Establishing a good business reputation is hard work, especially when you’re just starting out. Liability insurance shows potential clients that your business can withstand common accidents and lawsuits, which increases your dependability.

Example: An accountant who is new to the industry offers tax preparation services to a potential client. Because the accountant has professional liability insurance, the client knows that losses will be paid for up to the coverage limits if a mistake is made. The accountant gets the contract, even though his reputation is not established.

A certificate of insurance outlines important details about your insurance coverage. When those details change, such as limits or endorsements, you may need an updated certificate. That's especially true if you need to present a COI to a client or landlord to prove you have sufficient coverage.

Most insurance companies use a standard form for certificates of insurance. That means once you can read one form, you should be able to read them all.

Check out our guide on how to read a certificate of insurance form for help on understanding each section of the form. We also have a glossary of terms used in business insurance, which may help you understand your certificate.

If you still need help, feel free to ask an agent.

If you don't have sufficient coverage for a contract or lease, you'll need to go back to your insurer and increase your policy limits. Once you have increased the limits to meet the requirements, ask your insurance company to reissue the certificate so you can prove you have adequate coverage.

Each certificate of insurance covers only one type of business insurance. That means you may need several certificates of insurance to fulfill requirements for different types of coverage, such as:

• General liability insurance
• Errors and omissions insurance (E&O)
• Workers' compensation insurance

For example, a general contractor might need both general liability insurance and workers' compensation insurance in order to sign a contract. The contractor would need to present the client with two certificates of insurance, one for each policy, to secure the job.

Yes. Insureon offers digital certificates through the online Customer Portal, in My Profile. A digital certificate offers the same proof of insurance as a physical copy of the certificate.

If you have any problems downloading a certificate, contact us to receive it via email.