What is a certificate of insurance (COI)?

A certificate of insurance (COI) is a short document, issued by an insurer or broker, that summarizes a business's insurance policies: the insurer, policy numbers, types of coverage, limits and effective dates. It is evidence that coverage was in place when it was issued, and it does not change the policy itself.

How it is used

General contractors collect certificates from every subcontractor before they start work, and owners and landlords collect them from contractors and tenants. The contractor checks that each policy meets the contract: the right types of coverage, high enough limits and dates that cover the job.

  • In the US, the most common form is the ACORD 25 certificate of liability insurance.
  • In Canada, brokers issue their own certificate forms. Workers' compensation is handled separately: contractors ask for a clearance letter from the provincial board, such as WorkSafeBC.
  • Being named as an additional insured needs an endorsement on the policy. A line on the certificate alone doesn't create that coverage.

Worked example

RequirementContractSub's certificateResult
General liability, per occurrence$2,000,000$1,000,000Not met
General liability, aggregate$2,000,000$2,000,000Met
Auto liability$1,000,000$1,000,000Met
Expiry dateAfter the job ends in JuneMarch 31Renewal needed

The aggregate matches, but the per-occurrence limit is half what the contract requires. The sub needs a higher limit or an umbrella policy, and a renewed certificate before March 31.

Common mistakes

  • Reading the aggregate as the per-occurrence limit.
  • Accepting a certificate that has already expired, or not tracking renewal dates.
  • Relying on the certificate for additional insured status without the endorsement.
  • Forgetting workers' compensation, which is usually a separate document.

Related terms

  • Lien waiver (statutory declaration): A lien waiver is a document in which a contractor, subcontractor or supplier gives up its right to file a lien on a property for amounts it has been paid.
  • Draw request: A draw request is a request to be paid for construction work completed during a period, sent to a construction lender or to the project owner.
  • Change order: A change order is a written amendment to a construction contract that changes the scope of work, the price, the schedule, or all three, agreed by both parties.

Further reading