What is the purpose of Certificate of Insurance(COI)?

The Certificate of Insurance (COI) is a legal document issued by insurance companies or brokers. It verifies the existence of an insurance policy and summarizes the key terms and conditions of the policy. For instance, a standard COI lists important details such as the policyholder's name, the effective date of a policy, the type of coverage, and policy limits.

Without a COI, a company or contractor may face difficulties in securing clients or performing work; most hiring companies will not want to assume the risk of any costs caused by the contractor or provider.

Understanding Certificates of Insurance

Certificate of Insurance is used when liability and substantial losses are an issue and require a certificate, which is in most business contexts. A Certificate of Insurance enables small-business owners and contractors to protect themselves from liability for work-related accidents and injuries. The purchase of liability insurance will typically trigger the issuance of an insurance certificate.

Without a COI, small business owners and contractors may find it difficult to win contracts. Due to the fact that many companies and individuals hire contractors, the client needs to know that the business owner or contractor has liability insurance so that they are not at risk of damage, injury or substandard work.

Validating a Certificate of Insurance

The client will often request a certificate directly from the insurance company and not from the business owner or contractor. The client should check to ensure that the name of the company or contractor on the certificate matches the one they are considering.

Additionally, the client should check the coverage dates on the policy to ensure the effective date is current. If the policy is set to expire before the contract work is completed, the client should secure a new certificate.

Details of a Certificate of Insurance

A Certificate of Insurance contains a section for each type of liability coverage. Liability coverage sections include general, auto, umbrella, and workers' compensation coverage. "Insured" refers to the person or company listed as the insured on the certificate.

In addition to the coverage levels, the certificate contains the policyholder’s name, mailing address, and details of the operations the insured performs. Additionally, the contact information for the insurance agent or insurance agent is included on the certificate. In cases where there are several insurance companies involved, all names and contact information are listed.

When a client requests a Certificate of Insurance, they become a Certificate holder. The client's name and contact information appear in the bottom left-hand corner of the certificate along with a statement showing the insurance company's obligation to notify the client of policy cancellations.

The certificate outlines the insured's policies and limits provided for each type of coverage. For example, the general liability section shows the six limits each policy provides by category as well as whether coverage applies on a per claim or per occurrence basis. Since state laws determine the benefits provided to injured workers, worker’s compensation insurance won’t list a coverage limit. However, employment practices insurance will list a coverage limit.

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Certificate of Insurance Tracking. Simplified!

About AlphaCOI (www.alphacoi.io): AlphaCOI is a convenient - easy-to-use, low-cost, SaaS Compliance Certificate Platform for managing and tracking requisite certificates of insurance(COI) across industries. The platform enables ACORD-type form uploads and provides the crucial notifications needed to ensure that they stay up to date and subscribers remain free from audit risk. The platform was developed by Avid Compliance, a Leesburg Virginia- based compliance management company aimed at eliminating the administrative burden of managing compliance and risk for its subscribers. The company does not sell insurance or ancillary products. The platform’s compliance and risk avoidance tools is all that we sell. The platform was created by contractors for contractors. The platform has modules for contractors, property managers and insurance salespersons and brokers. Click here for more information.


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