What Is a Certificate of Liability Insurance?
A certificate of liability insurance (COI) is a document that summarizes your company’s liability insurance coverage. It serves as proof that your company has purchased general liability, auto liability, or other types of liability insurance. The document provides a general overview of your liability policies, not a detailed coverage analysis. A COI is focused on liability coverages but it is not an insurance policy nor does it provide any coverage. Instead, it highlights key aspects of your policies, such as their effective dates, policy numbers, and limits of liability. Different COI forms are used for property and other types of insurance, including automobile and liability.
When Do You Need a Certificate of Insurance?
You’ll likely need a COI if your business is leasing a new location or equipment, or is trying to get hired by another company to perform work or provide a service. The hiring company may require you to provide a certificate before it allows you to initiate a lease or start any work. For this reason, you should request a certificate from your insurance agent or insurer as soon as you know you’ll need it.
What’s Included in a Certificate of Insurance?
Many insurers issue COIs on standard forms published by the Association for Cooperative Operations Research and Development (ACORD), a nonprofit research organization for the global insurance industry. Others use forms they’ve developed themselves. Regardless of the form used, a COI provides a snapshot of your company’s commercial liability insurance. It typically includes the following information:
Producer’s name and address (A “producer” is an agent or broker.) Your company’s name, address, and contact information List of insurers that provide coverage to your business Details regarding your company’s liability coverage, which may include general liability, auto liability, umbrella liability, and/or workers’ compensation. Includes policy numbers, effective dates, and the limits provided by each policy A description of your company’s operations, locations, and vehicles (if applicable) The name and address of the certificate holder (the business that requested the certificate) Signature of a person authorized by the insurer to approve certificates of insurance
How To Get a COI for Your Business
To obtain a COI for your business, there are a couple of key steps to follow. For instance, suppose a potential landlord requires a $2 million general aggregate limit on your liability policy. If the aggregate limit on your policy is currently $1 million, your insurance professional should communicate the cost of the additional limits. When all the required changes have been completed, ask your agent or insurer to issue the certificate.
The Bottom Line
A certificate of liability insurance serves as proof of commercial liability insurance. It provides an overview of your liability policies, including policy numbers, effective dates, and limits. You can obtain a certificate by requesting one from your insurance agent or broker or your insurer. You should seek a COI as soon as you know you’ll need one. A general contractor, property owner, or other business may prohibit you from starting work or leasing property until you’ve presented a signed COI.
