Certificates of Insurance (COIs): Why Clients May Demand Them and How to Provide Them

Certificates of insurance (COIs) are proof that you carry liability insurance. These documents are issued by an insurance company or broker, detailing your coverage details. COIs are essential for companies and contractors who work with clients and partners.

Not having the right COI can be a costly problem. Let’s go over what is a COI, the types of business insurance commonly required, and worst COI mistakes to avoid.

What Is a Certificate of Insurance?

A COI (Certificate of Insurance) relays what insurance coverage your business has to other parties. Each COI will include detailed information, such as:

• Policyholder
• Coverage type
• Limits
• Effective dates
• Insurer contact

COIs are not an actual insurance policy, but simply the proof of it. COIs must be updated with the right insurance information whenever policies are modified.

Clients may require your COI to comply with requirements so they know you have enough insurance and can add them as an additional insured. This lets them file insurance claims under your policies.

Why Clients Demand COIs

While business relationships require a degree of trust, it shouldn’t mean blind trust. COIs are proof that you have the insurance you say you do.

Risk management

Clients need proof that you can cover potential losses or damages in case a mistake or negligence occurs. Professional errors are something to be expected by companies because they can slip through even with the most experienced experts. Planning and insurance are essential to any risk management preparation.

Contractual compliance

Businesses and clients often put into the contract that you must show your COI before work begins. Without having a valid COI, you would be violating the agreement. Plus, the certificate details exactly how much insurance coverage you have. That way they can confirm if it is enough to cover the business risk and assets.

Financial protection

Insurance provides significant financial protection. And when we say significant, it means able to save you and your company from bankruptcy. Liability lawsuits are some of the most expensive and common lawsuits in any industry.

Plus, proving you have liability insurance assures clients that if something goes wrong, they won’t be responsible for the price.

Reputation and professionalism

Proactively providing your COI signals credibility and responsibility. It makes it more likely for your clients and partners to recommend you to others. If you say you are unable to provide a COI or don’t know how, clients are going to doubt your capabilities.

Industries and Situations Where COIs Are Common

Construction and contracting projects

The construction industry is one of the most dangerous of all industries. It almost always requires constructors to have COIs. Contractors, subcontractors, and other parties should all carry commercial liability insurance and workers’ compensation. Without adequate insurance, construction work should not begin.

Professional services

Any firm or individual providing professional services should provide COIs to their clients. Common examples include:

Consultants: Consultants of any type should have professional liability insurance, and be prepared to show their COIs to clients. Businesses will expect you to carry an amount of liability insurance that suits their business size and risks.

Designers: Intellectual property theft, copyright strikes, advertising damages, and other issues arise in designer fields.

IT firms: Cyber security and any technological services and SaaS companies should have COIs.

Event planning and venue rentals

Event planners need to prove to their clients that they carry sufficient insurance in case something goes wrong. Event planner insurance protects against liability lawsuits in case there is an incident such as:

• Mistaken event dates
• Venue issues
• Errors and omissions

Vendor–supplier relationships

Theft is a huge problem for retailers. Slip-and-fall or other bodily injury lawsuits are also extremely common inside retail shops. Product liability is also a great point of concern for both manufacturers and vendors.

COIs are able to show whether you truly have enough insurance for the business relationship to be as low-risk as possible.

Food and beverage businesses

Restaurants, caterers, and any business or individual who sells food or beverages should be able to show proof of liability insurance. Anything consumable can carry a risk of foodborne illnesses, allergic reactions, and contamination.

Freelancers or independent contractors

Freelancers in any industry who work with corporate clients should be able to show COI. Corporations work with significant financial assets and risks that need to be protected by insurance.

Types of Insurance Often Shown on COIs

General liability insurance

General liability insurance is the standard form of liability insurance for businesses. Small businesses generally benefit from general liability insurance that bundles multiple types of coverage together. GLI can cover:

Third party bodily injury: If anyone outside your company gets injured or ill because of your company, you can be sued for their injury expenses.

Third party property damages: If your business operations accidentally damage another’s property, insurance can cover property damage costs

Reputational harm: In a reputational crisis, insurance can provide funds to cover PR costs, legal fees, lost income, and crisis management costs.

Advertising injury: Libel, slander, copyright infringement, invasion of privacy, and other advertising injuries can be covered by general liability insurance.

Note that general liability insurance does not cover the medical expenses of workers who get injured or ill on the job. That type of business liability falls under workers’ compensation. General liability also does not cover damage to your own property, such as an office fire, since that requires commercial property insurance.

Professional liability (E&O)

Professional liability insurance, also known as Errors and Omissions insurance, is very common for companies and contractors. No matter if you’re an amateur or an experienced expert in your field, erring is human. A lapse in professional judgment or misplacing a decimal point could cost your client thousands or even millions of dollars.

Workers’ compensation

Workers’ comp is a special type of business insurance. Most companies with employees are expected to carry workers’ compensation coverage. If an employee gets injured or ill while on the job, workers’ comp provides benefits and payouts.

If the employee dies due to work-related reasons, workers’ comp also provides death benefits, which usually cover:

• Funeral expenses
• Income replacement
• Benefits to dependents (e.g. spouse, children)

Commercial auto insurance

Businesses that use vehicles, either for clients or employees, need commercial auto insurance. It is separate from individual car insurance. It typically covers:

• Collisions
• Bodily injury liability
• Property damage liability
• No-Fault or Personal Injury Protection (PIP) Coverage
• Uninsured motorist insurance
• Rental car insurance

Product liability insurance

Does your company sell, manufacture, or distribute products? You need product liability insurance. If the product sickens, injures, or kills anyone, you can get sued for liability. You would be expected to pay for any customers’ medical expenses used to treat the injury. Legal costs and attorney fees can also put a company out of business. Product liability typically covers:

• Design defects
• Strict liability (i.e. if a customer gets hurt using your product even though your business was not negligent)
• Unclear or improper warnings
• Manufacturing defects

Note that for business insurance to cover product recalls, you usually need a product recall insurance endorsement.

How to Obtain and Share a COI

Contact your insurance provider or broker

Most business insurance companies let you obtain and share your COI online once the policy has been issued.

Ensure the COI matches client requirements

Some clients will require greater coverage limits and more specific coverage types. They may also require your COI to contain additional details that are not on a standard COI, such as the additional insured status. The additional insured on COI refers to someone who benefits from the insurance of another policy, including the ability to file claims under that policy.

Delivery methods

Emailing your COI is a good idea since it creates proof that you have sent it. Ensure that you have sent it through official channels and followed any specific instructions they give. You can also provide your COI via a client portal. A physical copy may be preferred by some clients and partners.

Before delivering a COI, make sure you know what policy types and limits they require. COI requirements can vary greatly depending on what project you’re working.

Keep it updated

Expiration dates matter. You need to keep your COI updated. Reminder software and COI compliance services can help ensure your COI is always up to date with your different types of business insurance.

Common Mistakes Businesses Make with COIs

COI compliance can be tricky. Even the best risk managers find it to be a frustrating and time-consuming process if they have to manually track certificates. Here are 4 common mistakes businesses make with COI compliance.

1. Providing outdated or inaccurate certificates

Certificates of insurance are not insurance policies. Whenever insurance gets renewed, it is a good idea to obtain a new COI in case there are any policy changes. It is a huge problem if you provide an outdated COI or a COI with the wrong information.

Warning: Inaccurately reporting your insurance on a COI is actually against the law. Doing so purposefully can result in serious penalties. Misrepresenting coverages on purpose is also an issue.

Unfortunately, some industries lack standardized insurance. For example, Environmental Insurance COIs often involve inaccurate reporting because of how each singular policy is so customized.

2. Not listing clients as additional insured when required

Clients and partners may request that you add them as additional insureds before they sign a contract with you. It is generally a common practice for an additional insured addendum to be required.

3. Failing to match contractual coverage amounts

Just because your company carries the right policy type doesn’t mean it’s enough. Different companies and clients have varying coverage and COI requirements. Make sure that your COI meets the contractual coverage amounts in each type of policy.

Don’t lie about coverage amount if you don’t have enough. Fraudulent COIs expose companies to grave financial and legal risks. COI fraud can be charged as a felony. Better to decline a contract than to fudge COI details.

4. Assuming one COI works for all clients without customization

Some requiring companies have confusing insurance requirements. This can make it difficult to tailor the COI to them. Regardless of complexity, you should expect clients to have particular requirements, such as a specific way of COI delivery, deadlines, or minimum coverage limits.

Best Practices for COIs

COI management can be a pain point for many companies, especially those with numerous clients. Here are some COI best practices.

Maintain a COI log or tracking system

It’s 2025. You don’t have to manually track COIs anymore. It is generally a good idea to keep track of all your COIs using a specialized service or system.

Set reminders for policy and COI renewals

Every time your business insurance needs to be renewed or updated, your COIs also need to be redone. That way you can ensure that your COIs are always up to date and accurate. Insurance and COI reminders are useful for both large and small businesses.

Work with an insurance broker to streamline requests

Good business insurance brokers are able to help you streamline how COI requests and management are done. Letting COI compliance experts and insurance brokers deal with certificates of insurance is a good way to save your valuable time and minimize mistakes.

Conclusion

COIs are essential in building your trust and relationships with other businesses. They must be tailored to each client you work with, otherwise you may fail to:

• Meet insurance coverage requirements
• Include additional insured
• Deliver the COI properly
• Update your COI when your policy changes

Businesses should treat COIs as a standard part of their client onboarding process. Proactively asking about COI requirements can improve clients’ trust in your company and help you win a contract. Obtain the best business insurance to secure new contracts today.