Ask an Insurance Expert: What is a COI?
March 29, 2022
Hi, this is Bob with Evident. In the previous video, we looked at the reasons why businesses should ask if you have insurance before you start working together. In this video, we’ll explore how businesses can show that they have the right insurance. And to do that, we’re going to answer the question, what is a COI?
A COI or certificate of insurance is a free document that you can get from your insurer, your agent or your broker, and it shows that you have active insurance. So it was always given to you so you can give it to someone else who has asked for your insurance. It’s your proof of insurance. The most popular template is an ACORD form, although there are other templates out there. ACORD was created by the insurance industry decades ago to standardize and simplify how businesses communicate insurance information to another. And one of the most common forms you’ll see is the certificate of liability insurance.
If you’re asking for one to protect you or your company, if you’re being asked for one is to ensure that if you make a mistake, you can pay for any losses that you cause. A CLI provides a summary of the insurance you have within the context of your engagement. It has all the relevant information about you that producer and your carriers in the coverage issue have. It’s very common to be asked if you have general liability insurance if the possibility exists to hurt someone or damage their stuff. Auto insurance if you’re driving a vehicle to cover any liability from auto accidents you might cause on the road workers compensation to show that you can pay for any injuries or illnesses that your employee sustained on the job and umbrella or excess coverage which adds limits to your underlying policies.
A good COI should be tailored to meet the request. So if you have $10 million in limit and you’re being asked for $1 million, your certificate should just show that you have $1 million of liability limit. A certificate is not a legal document. It’s not a contract and it doesn’t change whatever is in your actual insurance policy. So if there’s a mistake printed on your certificate, it doesn’t amend that policy or give you more coverage or take coverage away it’s really for informational purposes. It’s just to show someone else that you have insurance.