In a dynamic business environment, insurance plays an integral role in safeguarding enterprises from unexpected events. Among the essential documents for maintaining such protection is the Certificate of Insurance (COI). This record serves as a concise overview of an individual, business, or organization’s insurance coverage and plays a pivotal role in a number of business transactions.

At Doeren Mayhew Insurance Group, we boast a legacy of over 130 years of providing comprehensive insurance solutions to businesses. With our reliable expertise in the field, we take pride in being your trusted advisor, offering insights into the complexities of business insurance. In this article, we shed light on the crucial role a COI plays in business — and explore how it is vital in protecting organizations from potential risks and liabilities.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance (or COI) is a one-page document that summarizes an insurance policy’s key details, such as coverage types, coverage limits, and policy effective dates. Whether it’s used as proof of insurance by the insured organization, or by third parties who need to verify sufficient coverage, a COI serves as a quick reference for those who need to see your insurance information without having access to all of your policy’s details.

What is a COI used for?

Many contracts and leases require businesses to provide a COI to demonstrate compliance with insurance requirements; for example:

  • Property and vehicle rental for individuals or businesses
  • Construction projects or renovation work
  • Event planning and management
  • Professional services (such as consulting)
  • Subcontractor arrangements
  • Joint ventures and partnerships
  • Loan or financing agreements
  • Government or municipal contracts

In all of these scenarios, a COI provides evidence that the insured party has the necessary insurance coverage to mitigate potential risks and liabilities. It provides peace of mind to all parties involved and helps ensure that adequate insurance protection is in place.

When and why should my business request a COI?

  1. Before Starting a New Project or Partnership: When your business is about to begin a new project or partnership that involves third-party vendors, contractors, or service providers, you should request a COI. This is to ensure that these entities have the necessary insurance coverage to protect against potential liabilities that may arise during the project.
  2. Compliance with Contractual Agreements: Many contracts, agreements, or leases stipulate that the parties involved must carry specific insurance coverages to meet contractual requirements. Requesting a COI from the other party helps ensure compliance with these contractual obligations.
  3. Risk Mitigation: To protect your business from potential liability claims that may arise from the actions or negligence of vendors or contractors, you should request a COI. This certificate indicates that the vendor or contractor has insurance in place to cover such liabilities, reducing your business’s financial exposure.
  4. Property Management: If your business owns or manages property that is leased to others, it’s common to require tenants to provide a COI for liability insurance. This ensures that tenants have insurance to cover any damages or accidents that may occur on leased property.
  5. Event Planning: When organizing events, conferences, or trade shows, requesting a COI from event venues, suppliers, or exhibitors is essential. It helps protect against potential accidents, property damage, or other unforeseen incidents during the event.
  6. Certificates of Additional Insured: Sometimes, businesses need to be added as an “additional insured” on another party’s insurance policy. Requesting a COI with this specific endorsement ensures that your business is covered under the other party’s policy in case of claims related to your mutual business activities.

The key reasons for requesting a COI are risk management, liability protection, and contract compliance. By obtaining and verifying COIs, your business can minimize risks and ensure that all parties involved in a project or contractual agreement are properly insured, providing peace of mind and protection against unforeseen events

Does my business need a COI?

In short, the answer is yes. Once you have an active policy in place, you will have access to a COI through your agent. A COI boosts credibility in professional circles. For potential clients and other collaborators, a valid COI instantly demonstrates your business’s legitimacy and adherence to industry standards. This helps you gain a competitive edge and position your business as a trustworthy and reliable partner.


Need help? We can help.

Having a valid, up-to-date insurance for your business and making sure your vendors are in compliance with your own standards is crucial to the success of your business. Whether you want to discuss your coverage options or review your existing policy, our experienced team is here to help. Contact us today to talk to a trusted insurance advisor and explore how we can assist you with your insurance needs.

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