What does a Certificate of Insurance (COI) really mean? - Compass Insurance Partners Skip to main content

What does a Certificate of Insurance (COI) really mean?

It’s spring and Nancy is ready to finally put that bathroom in her finished basement. She is so pleased when Joe, the owner of a reputable plumbing company in town, arrives to start the work. Nancy chats with Joe, gives a cursory look at the Certificate of Insurance (COI) he provides and work begins. All is well until…slip, boom, bang…Joe loses a fight with the new sink going down the basement stairs. Joe sustains some minor injuries that come with some major hospital bills. Nancy, while worried about Joe’s injuries, doesn’t think twice about whether or not Joe’s insurance company will take care of his injuries. Should she?

In service industries it is common practice for contractors to provide a Certificate of Insurance to customers and to general contractors. COIs inform certificate holders of lines of coverage, policy limits, and effective dates of policies. In some instances, they also disclose whether or not third parties are listed as additional insured’s on the policies in question.

In addition, ACORD 25 (2010), has an additional feature that denotes specific coverage of proprietors, partners, or officers that are individually included or excluded from Workers Compensation coverage.

Unfortunately a COI doesn’t actually provide coverage. It is simply a document produced at a point in time that shows what coverages are in force at that moment. Insurance policies are complex documents that give, take away, give back, & take back hundreds of coverages. A single page COI, while providing high level information about an entities insurance policies, does not always provide the level of assurance that is needed when conducting business with another business or person.

As always, if you would like help reviewing your Certificates of Insurance or the coverage they represent, our skilled agents at Compass Insurance Partners are happy to help.