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What is a certificate of insurance (COI)?

Proof of insurance for your business

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Certificate of insurance definition

A certificate of insurance is a document that shows you carry business insurance coverage, such as general liability insurance and workers’ compensation.

It also shows the policies have adequate limits of insurance to satisfy possible requirements for clients, partners and regulatory agencies. That’s why a COI is sometimes called “proof of insurance.”

Getting a COI is essential for many industries.

We’ve talked to some construction business owners who have to share a certificate nearly 200 times a year.

Other industries might not need proof of insurance that often, but it’s still important to know how to quickly and securely share your insurance information. It may be the difference that helps you get new business instead of your competition.

What’s listed on a certificate of insurance?

A certificate of insurance usually includes information about your insurance policy:

  • Policy holder’s name and company name
  • Policy number
  • The type of coverage
  • Coverage start date (effective date)
  • Amount of coverage
  • Coverage limits
  • Additional insureds
  • Coverage end date (expiration date)

There might be more or less information on your COI depending on the type of insurance you purchased.

Why is a COI important?

As a small business owner, there is a lot you need to have on hand to make your business successful.

One often overlooked document — but also one of the most important — is a certificate of insurance (COI).

“It’s a key that unlocks a lot of doors,” says Celeste Knight, a product manager at NEXT who works on certificates of insurance. “If you’re somebody that works with a lot of different clients, your certificate is the way you’ll be able to bid on jobs, get registered and licensed, and build trust.”

Why you might be asked to provide a certificate of insurance

There are a variety of reasons why someone might ask to see your COI, including:

  • A potential client might ask for one before working with you
  • You might need one to get a professional license
  • A commercial landlord might ask for a COI before finalizing a lease agreement
  • It might be required for a bid
  • Some contracts require you to have a COI
  • A new business partner might ask for proof of insurance

How different industries use COIs

Construction: A general contractor could be asked for a COI before starting work on a home remodeling project. The contractor might also want proof of insurance from a plumbing subcontractor to ensure the plumber’s insurance could pay for damages during that part of the project.

Real Estate: The developer of a residential complex might want a certificate of insurance from a real estate agent to make sure they have enough professional liability insurance to help cover any financial fallout if there is a professional mistake with a potential buyer or tenant.

Cleaning: Larger clients could ask cleaning business owners to provide a certificate of insurance to show that they can potentially cover property damage or injuries they cause during their services. Business owner’s could also use it as a marketing tool to land new clients.

Food service and retail: A commercial landlord or property owner might ask for a certificate of insurance before signing a lease to make sure you are protected from expenses related to accidents that happen while you occupy the rented space.

How to respond to requests for a certificate of insurance

To get a COI the traditional way, you have to contact your broker or insurance company, let them know what you need and wait for them to send you a copy, which can sometimes take days.

You might also be charged a fee to get your COI from some insurance providers.

The document small business owners often receive is a PDF ACORD certificate of insurance template. ACORD is a global nonprofit standardization organization for insurance and financial industries.

It looks a lot like a tax form or similar document.

Old school vs. new school COIs

NEXT uses technology that allows you to take the process of getting a certificate of insurance into your own hands.

If you have active NEXT coverage, you’ll have 24/7 access to your “live” certificate of insurance. It usually includes the information you would get with an old-school PDF, but it’s updated automatically any time your coverage changes or you add an additional insured.

“The information that is shown on your live COI is a real-time snapshot of what is true right now for your insurance coverage,” Knight says. “When you send a PDF it’s static information from whenever it was created.”

It’s an open secret in the industry that some insurance fraudsters will buy coverage, share their PDF certificate to get a job and then cancel their coverage right away just to save a few bucks. In addition to being unethical, this could be illegal in some instances.

When you have a NEXT live certificate, anyone you share your link with can check on the status of your coverage, showing you’ve got nothing to hide and they’ve got nothing to worry about

“It makes you more compelling to work with from a client’s perspective, which gives you a competitive edge,” Knight says.

6 ways NEXT’s certificate of insurance can help your business

Whether you’re trying to land a new client or seal the deal with a business partner, some people won’t do business with you unless they know you’re insured.

Here’s how the NEXT live certificate can help you get your COI requirements met faster, so you can get back to business.

1. It’s instant

Getting a certificate of insurance the old-school way takes time. You have to get in touch with your broker or insurer and tell them about any changes or unique information it needs to include.

Then you have to wait for them to send it to you, usually by email or mail. The process can take days or even weeks.

With NEXT, there’s no waiting around.

As soon as you purchase a policy, we automatically create your certificate of insurance, and it’s available for you to share from your account with only a few clicks or download it whenever you want.

You can also immediately add third parties who want to be listed on the COI.

2. It’s live

Whenever you modify your coverage with us, your COI gets automatically updated so it’s always accurate.

As your business grows and changes, your insurance needs will likely change too.

With a traditional insurer, you would have to wait for them to update your insurance certificate and send you a new copy every time you make a change.

Anyone who visits your live certificate can rest easy knowing it’s accurate up to the moment they’re looking at it.

3. It’s free

We never charge you fees for your COI, no matter how many copies you need or third parties you want to add.

Getting an initial COI from other traditional carriers usually won’t cost you anything upfront. But if you need to make changes, such as adding an additional insured, you may be charged a fee, which could set you back anywhere from $25 to $100.

At NEXT, listing additional insureds is free.

4. It’s unlimited

Do you need a slightly different COI to meet the needs of different clients or business partners who want to be listed as a certificate holder? No problem.

Get as many COIs as you need as often as you need.

5. It’s available 24/7

Being a small business owner is a 24/7 job. If it’s more convenient for you to access your COI and share it with clients at 2 a.m. instead of 2 p.m., we’ve got you covered.

You don’t have to get your COI during traditional business hours. It’s available any time, day or night.

6. Third-party requests

There may be times when a client or business partner  will ask to be listed as a certificate holder or have additional information added to the certificate.

With our live certificate, when you share your COI with another person, they see the live certificate page. With just a few clicks, they can request any changes they want.

The request goes straight to you in your online account and you choose whether to approve or deny it.

If you approve the changes, the certificate is automatically created and sent back to the requester. If you deny the changes, the requester receives an email telling them the changes aren’t approved.

How NEXT protects small business owners

We’re a one-stop shop for small business insurance.

You can get a quote in just a few minutes online and customize your insurance package with general liability, workers’ compensation, professional liability, commercial auto or commercial property insurance.

Our DIY system makes it easy for you to review your coverage, make changes to your existing policies and get copies of your certificate of insurance at any time, from anywhere.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Get a free, instant quote today.

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Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

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