What is a COI
and Why is it Important?

A Certificate of Insurance (COI) is a document provided by an insurer or broker that validates an insurance policy’s presence and outlines its key terms. Typically, a COI includes the policyholder’s name, policy’s start date, coverage type, limits, and other vital policy specifics. Lack of a COI can hinder businesses or contractors from attracting clients, as clients are unlikely to want to bear the expenses arising from potential contractor/provider risks.

Certificates of Insurance (COIs) are a standard requirement in situations where liability and substantial losses are a concern, which is prevalent across most business scenarios. COIs serve the purpose of validating insurance coverage.

For small business owners and contractors, a COI is often mandatory to demonstrate insurance coverage against liability arising from workplace accidents or injuries. When obtaining liability insurance, an accompanying insurance certificate is usually provided by the insurer.

The absence of a COI could impede a business owner’s or contractor’s ability to secure contracts. As contractors are frequently hired by companies and individuals, clients seek assurance that the contractor has liability insurance. This prevents the client from assuming any risk in case the contractor is accountable for damage, injury, or subpar work.

Essentially, when hiring an independent contractor or business for their services on your property, you should require a certificate of insurance (COI). If you are a contractor or business, you should have a COI so you can prove to your clients that you are insured.