What is a Certificate of Insurance What is a COI

How's it going? Thanks for tuning in. If you are a business owner, CFO, executive, or somebody within a business that handles the commercial insurance program, then this video is for you. A certificate of insurance, commonly referred to as a COI, is one of the most common insurance documents that a business will deal with. But at the same time, it can be one of the most misunderstood. So today, I want to break down what exactly a COI is, when you need to have one, and then what you should actually be paying attention to on that document. Thank you for stopping by. My name is Brian. I'm an independent insurance agent based here in the state of Michigan, Metro Detroit specifically, and I work with businesses on their commercial insurance programs, as well as helping families and individuals with their personal insurance, their home, their auto insurance as well. My goal with this channel is to pass on a little bit of educational information to you, so that you can make more informed decisions around your insurance and then overall help answer any questions that you might have. So let's get into it. And before we get too far into the video, I do want to invite you to subscribe to the channel. And if you find this video helpful, useful, anything like that, please feel free to like, share, pass along with anyone else as well. So at its core, a COI is essentially a one-page snapshot of your insurance coverage. It shows the policies you have in place, the insurance companies that you have those policies with, what the exact coverage limits are for those policies, and their effective dates. What a COI is not is coverage itself. It doesn't show what your policy covers. It doesn't make any changes to your policy, and it doesn't necessarily guarantee that any sort of claim will be paid. It's simply just proof that insurance exists for your business at a certain point in time. Now, businesses will typically need a COI whenever there is any sort of contract involved. Common examples of this might be if a landlord asks a tenant for a COI, general contractors requesting certificates from their subcontractors, if a property owner is hiring someone to do work for them, or clients asking service providers to provide proof of insurance before they start working on a project. From the other side of things, businesses require certificates of insurance to reduce their own liability and exposure. They want to know that if something goes wrong, an injury, property damage, a lawsuit, the other party has insurance in place and that that liability isn't going to 100% fall back on them. Now, one of the most important things with these documents is to make sure that the certificate holder is listed accurately. This should be the business that is requesting the COI and their name and address, or maybe if you're a contractor doing residential work, this would simply be the full name and address of whoever's requesting the COI. And then with COIs, you also want to confirm the coverage is listed. For example, you might be required to have general liability, worker's comp, commercial auto, maybe umbrella coverage. This will depend on each individual contract that you have in place. Another big one is going to be the specific coverage limits for each policy. Just because you have insurance in place doesn't mean that you have enough coverage for that specific contract. And then finally, where things can get tricky is with additional insured language. Many contracts will require that a certain party is added as an additional insured to the policies in a specific way. And this provides certain protections to that party under the other business's policy. Some businesses can get very specific with this, so you do want to make sure that that wording does match up with what they have in their contract. And then one important thing to understand with all this is that COIs don't override the policy. If coverage doesn't actually exist on the policy itself, a COI doesn't magically create it. This is why both giving out certificates of insurance and collecting them should be done carefully. If you're giving one to another business, make sure that it does accurately reflect that the coverage you have in place at that specific time. And if you are collecting one, make sure that you review it and don't just simply file it away blindly. Certificates of insurance can be somewhat simple documents on the surface, but they definitely play a big role in protecting businesses on both sides of a contract. So thank you for watching. And if you are looking for help with your commercial insurance program or insurance in general, I would love the opportunity to work with you and see if our team can help. There are a lot of ways to get ahold of me and they should all be in the description below. Please feel free to text, call, email.