Certificate of Insurance
What is Certificate of Insurance?
A certificate of insurance (COI) is a one-page summary of an insurance policy, issued by your broker or agent, that lists the insurer, the policy numbers, the coverage types, the limits, and the effective dates so a customer can verify you are insured. In the US the standard document is the ACORD 25 Certificate of Liability Insurance. A certificate is evidence, not coverage: it does not amend, extend, or alter the policy behind it, and it confers no rights on the party holding it. Commercial clients, property managers, and general contractors routinely require a current COI — and often an additional-insured endorsement on the policy itself — before work can start on site.
On residential work an insurance certificate rarely comes up. On commercial work it is the gate: property and facility managers and general contractors will not release a site without one, and the requirement comes from their own risk policy rather than from negotiation with you. That is why coverage in the trades is so often set by contracts rather than statute — a point the electrician insurance guide and the junk removal insurance guide both work through, and the cleaning insurance and bonding guide covers for a trade where bonding sits alongside the certificate. The same document is called a certificate of currency in Australia rather than a certificate of insurance, though it plays an identical role.
What the document is not is coverage. New York’s Department of Financial Services, in an opinion on ACORD certificates, quotes the form’s own language: it “is issued as a matter of information only and confers no rights upon the certificate holder” and “does not amend, extend or alter the coverage afforded by the policies below.” If a client needs to be an additional insured, that has to happen on the policy; the certificate only reports it.
Two habits follow. State the insurance requirement in the agreement itself, which the service contract template leaves room for. And treat the premiums behind the certificate as real cost — workers’ compensation especially, which belongs in the labor burden rate calculator rather than in invisible overhead.