Certificate of insurance for vendors

A certificate of insurance (COI) is a document sent by a vendor’s insurer that confirms they have adequate insurance coverage. Also known as an ACORD 25 form, a COI verifies the vendor’s policy details, including:

• Names of the insurance provider and the insured
• Type of coverage
• Policy number
• Policy term details, including effective date and expiration date
• Coverage limits

While small business owners typically need a COI to prove they have general liability insurance, it can also verify other types of insurance, such as:

• Workers’ compensation insurance
• Commercial property insurance
• Commercial auto insurance
• Professional liability insurance, also called errors and omissions (E&O) insurance

Before you can sell goods or professional services at their location, most venues will require you to sign and follow a contract agreement. If a venue contract requires certain types of vendor insurance coverage, a COI can confirm your compliance.

Here are some businesses that typically need a vendor COI:

• Food trucks, bakers, and other types of food vendors
• Artisans and other retail vendors
• Caterers and mobile bartenders
• DJs, musicians, and other event entertainers
• Independent contractors

A COI gives a certificate holder instant credibility and ensures event planners and venue management companies that if something goes wrong, you can cover a claim, and they won’t get stuck with the bill.

For example, if an event attendee slips in your booth, a customer gets sick from your goods, or your equipment ruins the venue’s floor, a commercial general liability policy will cover the costs for damages, including:

• Medical expenses for third-party bodily injuries
• Repair and replacement costs for third-party property damage
• Personal and advertising injury claims, such as libel and slander
• Legal defense costs, including attorney’s fees and settlements, if you’re sued

No, not every vendor needs an ACORD certificate. However, even if a venue doesn’t have insurance requirements, it’s still recommended. Without coverage, the costs of third-party claims and lawsuits can be devastating to a small business.

Some seasonal vendors and gig workers might consider short-term liability coverage, assuming it’s more affordable, since it provides the same coverage as a standard policy for a shorter amount of time.

In reality, year-round coverage is typically the cheaper, smarter choice for most vendors, including side hustlers. This is because:

• Stopping and restarting coverage creates gaps that will expose your business to risk.
• Annual policies usually cost less per month in the long term.
• Continuous coverage helps when you need insurance to maintain a business license.
• Year-round coverage keeps stored equipment and inventory protected even during the off-season.

With an additional insured endorsement, you can be added to a venue’s insurance policy, or you can add a partnering vendor to yours. As an option for many small business policies, this endorsement protects contractors, subcontractors, and other non-employees from bodily injuries, property damage, and other common third-party risks.

If you’d like to learn more about including additional insureds on a policy, one of our licensed agents would be happy to help you:

• Review the policy
• Determine whether an additional insured can be added
• Assess the level of coverage requested
• Understand any applicable policy limits or exclusions for the additional insured
• Get a certificate of liability insurance that includes all of the policy’s insureds

Covering all necessary third parties is a key part of an effective risk management strategy, and can help your business earn trust and strengthen relationships with customers, other vendors, and business partners.

However, it’s important to understand the coverage limitations when you’re added to a venue’s policy. Typically, additional insured endorsements only cover claims caused by the policyholder’s actions, which makes it even more important to carry your own liability coverage for better financial protection.