What Is A Certificate Of Liability Insurance (COI)?

As a business owner, you are responsible for the safety of your employees, customers, and anyone else who may be affected by your business operations. You need to have the proper insurance to protect your business in case of an accident, injury, or property damage.



A Certificate of Liability Insurance (COI) is one of the most important documents you need to have to prove that you have the necessary insurance coverage in place. This blog post will cover everything you need to know about a COI, including what it is, why you need it, and how to get one. Read on to learn more.

What is a Certificate of Liability Insurance?

A Certificate of Liability Insurance(COI) is a document that proves that you have a liability insurance policy in place for your business. This document is sometimes referred to as an ACORD 25 form or a proof of insurance.

The purpose of a COI is to provide proof of insurance to your customers, suppliers, landlords, and anyone else who may need to see it. It is important to note that a COI is not an insurance policy; it is simply proof that you have insurance coverage in place.

What Information Should Be Included in a COI?

A COI should include the following information:

The Name of the Insured (i.e., Your Business)

Ensure the information on your certificate matches the information from when you registered your business with the state to avoid any penalties.

The name listed on your certificate must correspond with the company name given to the party requesting the certificate. If there's any discrepancy between them, there's a chance the certificate might get rejected.

The Insurance Company Name and Address

This is the name and address of the insurance company that issued your policy. A key concept of insurance is that the provider can settle a policyholder's claim. Also, many businesses only collaborate with other businesses that are insured by companies holding good financial ratings.

This insurance company information will allow you to check the essential details about any insurance companies you are working with.

Type of Coverage

The type of coverage must be specified on the certificate. The three most common types of business liability insurance are:

• Product liability insurance: This insurance protects your business against claims arising from problems with the products you sell.
• Professional liability insurance: This type of insurance protects your business against claims arising from your professional advice or services.
• General liability insurance: This insurance protects your business against various claims, including those arising from your products, services, premises, and operations.

The COI should categorize the types of liability insurance coverage included in the policy to make it easier for the reader to understand what is and isn't covered.

The Policy Number

This is the number assigned to your specific policy by the insurance company. In case of any questions or discrepancies, this number is used to look up your policy and verify its details.

The Policy Period

This is the date range that your policy is in effect. It's important to check that the dates on your COI match the dates of your policy to avoid any issues.

The Limits of Liability

This is the maximum amount your insurance company will pay out in case of a claim. Depending on the type of business you have, you may need to have different limits for different types of coverage. Verify that the limits of liability on your COI match the limits of your policy.

Why is it important to have a Certificate of Liability Insurance?

There are several reasons why having a Certificate of Liability Insurance is essential. These include:

Avoid Legal Issues

With the high cost of lawsuits and settlements, it is essential that you have the proper insurance coverage in place to protect your business. If you are sued for damages, the first thing that will be asked for is proof of insurance. If you do not have a COI, you could be found liable for the damages, even if they are not your fault.

Without insurance, you would have to pay for these damages out of your pocket, which could quickly bankrupt your business. Even if you are not at fault, the legal costs associated with defending yourself can be prohibitive.

Meet Customer Requirements

Many businesses require their suppliers, contractors, and other business partners to have liability insurance. This is typically done to protect the company if someone is injured or property is damaged while working with you.

If you do not have a COI, most businesses will not do business with you. As such, you must have one in place if you want to do business with larger companies that have this requirement.

Provide Quick Access to Information

A COI is a quick and easy way for anyone who needs to see it to access information about your insurance coverage. Rather than having to track down your insurance agent or company, they can request a copy of your COI.



This can be especially helpful if you work with multiple businesses or are frequently asked to provide proof of insurance.

How Can I Get a Certificate of Liability Insurance?

If you already have liability insurance for your business, the easiest way to get a COI is to contact your insurance agent or company and request one. They should be able to provide you with a COI within a few days.

If you do not have liability insurance, you will need to purchase a policy before you can get a COI. There are a few different ways to do this, including contacting an insurance agent or broker or purchasing a policy online.

When shopping for insurance, compare rates and coverage options from multiple insurers to find the best policy for your business.

How Much Does a Certificate of Insurance Cost?

Most insurance companies will provide you with a COI free of charge if you have an active policy with them. If you need to purchase a liability insurance policy, the cost will vary depending on several factors, including the type and size of your business, the coverage limits you select, and the insurer you use.

You can typically get a quote for liability insurance by contacting an insurance agent or broker or by getting a quote online.

The Bottom Line

A Certificate of Liability Insurance is a document that proves that a business has insurance coverage. This document is typically required by businesses when working with other companies, as it provides proof that the business has the financial resources to cover any damages that may occur. A COI typically includes information about the insurance policy and the coverage limits.

Most insurance companies will provide you with a COI free of charge as long as you have an active policy with them. Contact your insurance agent or company to request a COI today to secure your business.