What is a Certificate of Insurance (COI) and Do I Need One?

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For many consumers, insurance is something they buy once for a particular asset or service and forget – hoping they won’t need to deal with it again. Unfortunately, this ‘buy and forget’ approach doesn’t work in all situations, and there are plenty of cases when a COI (certificate of insurance) is also needed. This article will go over what this certificate stands for and how you might need it.

What exactly is a COI?

A certificate of insurance is a document that confirms you have insurance coverage and summarizes all of the main details of this plan. People often mix it up with an insurance policy, but these are two different things. A signed policy tends to be lengthy and go over lots of rules, restrictions, laws, and other details that don’t apply to you – but apply to the service being provided. 

The COI, however, will be a summary of the coverage afforded to you by the insurance provider. Normally, it’s a compact document that can be quickly read and understood.

When is a COI needed?

COIs are most common when a business or organization has to deal with partners, contractors, authorities, and other persons involved in a project. It serves as proof that some protections or compensations will be provided in case something goes wrong with the project – which the insurance policy accounts for. Many businesses will wait for a contractor to provide a COI before hiring them, considering this an essential requirement.

Which types of COI can be obtained?

You can get a COI for most types of insurance, but there are three prevailing categories – liability insurance, worker compensation insurance, and vehicle liability insurance.

The general category of liability insurance protects against claims connected to injury or damage. In other words, if a person gets hurt in a project or some property experiences damage, this could spur an expensive lawsuit that the coverage is meant to apply to.

Workers’ compensation insurance is exactly what it sounds like and compensates workers for things that happened to them on the job. The two most common examples are sustaining an injury or falling ill. It can also cover rehabilitation costs and compensate family members of workers that lost their lives.

As for vehicle liability insurance (commonly referred to as motor insurance), it is meant to cover costs related to car accidents – damage to other drivers, pedestrians, and property. Sometimes, this category of insurance is also used for industrial vehicles and machines.

You can get your certificate from the same insurance company or broker that assigned the policy and coverage in the first place. Usually, this is a fast process that won’t cost you too much.

How long does COI coverage last?

Most COI certificates have the same expiration date as the insurance policy in question, but there are plenty of exceptions. For example, changes made to the policy won’t be reflected on the existing certificate, so a new one would need to be made and the old one voided. And it’s recommended to keep a COI for reference purposes – even after it expires.