Certificates of insurance, otherwise known as COIs, are documents issued by insurance carriers, wholesalers, and brokers.

They outline the name of the insurance carrier, name of the insured, essential terms and conditions, policy limits and the effective dates of a policy.

COIs are used across a variety of commercial business relationships and serve as proof that a particular party has an insurance policy in effect.

They indicate that the insured company has the financial resources available to protect those who may be harmed by their actions.

When accounting for risks related to contracted work, securing your own insurance is not always enough.

One of the main ways organizations manage and review the coverages of their partners, vendors, and subcontractors is through COIs.

Business arrangements with other contractors and vendors can open you up to a number of risks that need to be accounted for through insurance and it’s a critical that you check to make sure your partners are covered as well.

This involves getting COIs for every subcontractor or third party they bring onto a project.

Even if one has worked with the third parties in the past and trusts them, COIs prevent organizations from accidentally taking on risks associated with the work of their subcontractors and vendors.

Following a loss involving a subcontractor or vendor, your business could be the one held liable for any damages that occur.

To be proactive against this, many organizations implement a partner COI management process.

COIs also contain qualifying language that defines the document as informational.

This means that COIs are not contracts or the legal equivalent of actual insurance policies so many organizations will require the additional insured endorsements as proof.

For more information, check out our video on the Additional Insured Endorsement.

For the insured, Certificates of Insurance serve as proof of coverage that can be provided to customers, contractors or other third parties quickly and efficiently to secure jobs.

Managing COIs can pose an administrative challenge, and businesses need to have procedures in place to collect and maintain them effectively.

We are available any time to answer your insurance or risk management questions. We will see you again soon!