What Is a Certificate of Insurance (COI)?

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A certificate of insurance (COI) is a document issued by an insurance company or its agent or broker that confirms a policy is in force and summarizes its key terms: who is insured, what types of coverage they carry, the limits of that coverage, and the dates the policy runs. In business, a COI is how a contractor, vendor or service provider proves to a client that they have liability insurance before any work begins.

How a Certificate of Insurance Works

A COI involves three parties. The insured is the policyholder, the person or business covered by the policy (for example, a plumbing contractor). The issuer is the insurance company, agent or broker that produces the certificate. The certificate holder is the party that requested proof of coverage, typically the client hiring the contractor.

The process starts with the policy. A business buys liability coverage first, and the insurer or agent then produces a certificate summarizing it, so a COI always comes after the insurance. Many insurers send one at purchase, and agents can generate additional certificates for specific clients on request.

When a client asks for proof, the contractor contacts their agent or insurer, who issues a certificate naming that client as the certificate holder. The client’s name and address appear in the certificate holder box, usually in the lower left corner, alongside language about notice if the policy is canceled.

The reason the system exists is risk transfer. If a contractor floods a basement, injures a passerby or does work that causes later damage, the client wants the contractor’s insurer to pay, not the client’s own policy.

What a Certificate of Insurance Shows

In the U.S., most business certificates follow a standardized industry layout (the ACORD 25 form is the common one for liability coverage). The main fields are:

• Producer: the agent or agency that issued the certificate, with contact details.
• Insured: the policyholder’s legal name and mailing address.
• Insurers: each insurance company providing coverage. If several carriers are involved, all are listed.
• Coverages: separate sections for commercial general liability, commercial auto, umbrella or excess liability, and workers’ compensation with employer’s liability. Each line shows the policy number, effective date, expiration date and limits.
• Description of operations: what the insured does, and sometimes references to a specific project, location or vehicle.
• Certificate holder and cancellation: the requesting party and the notice wording.

Interpreting the coverage section

The general liability section summarizes six limits: each occurrence, damage to rented premises, medical expense per person, personal and advertising injury, general aggregate, and products and completed operations aggregate. It also indicates whether the policy is written on an occurrence basis (covers incidents that happen during the policy period, whenever the claim is filed) or a claims-made basis (covers claims filed while the policy is active, subject to its terms).

Workers’ compensation is handled differently. Because state laws set the benefits owed to injured workers, that line typically shows no dollar limit (often marked “statutory”). The employer’s liability portion beneath it should still list dollar limits.

Example of a Certificate of Insurance

Hypothetical example for illustration only. A homeowner hires Ridgeline Roofing LLC for a job scheduled to run from late November to mid-February. Ridgeline’s agent sends a COI showing:

• General liability: $1,000,000 each occurrence, $2,000,000 general aggregate, occurrence basis
• Workers’ compensation: statutory; employer’s liability $500,000 each accident
• Policy period: January 1 to December 31

Two checks matter here. First, the insured name reads “Ridgeline Roofing LLC,” matching the contract exactly. Second, the general liability policy expires on December 31, before the job ends. The homeowner should request a renewed certificate after January 1 to confirm coverage continues for the rest of the work.

Who Needs a Certificate of Insurance

Contractors, consultants, delivery services, event vendors and other businesses that work on someone else’s premises or handle their property should be ready to provide a COI. Landlords, property managers, general contractors and commercial clients routinely require them.

Anyone hiring an independent contractor or vendor to work on their home or property, whether a business or a homeowner, should require one. If a written contract sets insurance requirements, such as minimum limits or specific coverage types, the COI is how they are verified before work starts.

How to Validate a Certificate of Insurance

Documented cases exist of contractors submitting altered or fake certificates, so the source matters. A client can protect itself by:

1. Requesting the certificate directly from the contractor’s insurer or agent rather than accepting a copy from the contractor.
2. Matching the insured name exactly to the business named in the contract.
3. Checking the policy dates to confirm coverage is current and runs through the end of the work.
4. Comparing limits and coverage types against what the contract requires.
5. Calling the producer listed on the certificate to confirm the policy is active if anything looks inconsistent.

Request a new certificate even from a contractor you have used before, since coverage may have lapsed, changed carriers or been reduced since the last job.

Limitations of a Certificate of Insurance

A COI is informational. It reflects coverage on the day it was issued, and a policy can be canceled, not renewed or amended afterward. The certificate holder receives no rights under the policy just by holding the certificate, and the summary does not override the policy’s actual terms, exclusions or conditions.

Being a certificate holder is not the same as being an additional insured, a distinction readers often confuse. Additional insured status, which can let the client claim directly under the contractor’s policy, is created by an endorsement to the policy itself. A certificate may note that status, but only the endorsement makes it real, so contracts that require it should ask for the endorsement too.

Cancellation notice is another limit. The certificate describes notice to the holder, but whether and how notice is delivered depends on the policy provisions, so the certificate does not guarantee the holder will hear about every change.

Terminology varies as well. “Certificate of coverage” is sometimes used for the same idea, particularly for workers’ compensation, while “evidence of insurance” forms are often used for property coverage in lender and lease situations.

How Long to Keep a Certificate of Insurance

A COI is accurate only through the policy’s expiration date, so work beyond that date needs a new one. Keep old certificates anyway: claims can surface long after a job ends, and a dated certificate records which insurer covered the work at the time, whether the work was done on your premises or you did it for someone else.

The Bottom Line

Anyone hiring a contractor or vendor, and any business that works on a client's property, relies on certificates to confirm liability coverage before work begins. Because a COI only reflects coverage on the day it was issued, clients should verify dates, limits and names, ask for a renewed certificate when a policy expires mid-job, and require the actual endorsement when a contract calls for additional insured status. Keeping old certificates helps if claims surface later.