Certificates of Insurance (COIs)

Embroker helps you get certificates of insurance to prove to potential business partners and customers that your business is properly covered with the right insurance and that it is safe for them to do business with you.

A certificate of insurance is often requested in the case of a project or job in which liability concerns and the possibility of great financial losses are very real. In such a case, your client or partner will request a COI from you to prove that certain liabilities will be covered by your insurance program. A certificate of insurance protects both you and your partners and gives both of you peace of mind before working together in any way.

Despite the fact that certificates of insurance are so vital to many business processes, obtaining them from a traditional broker is often a slow and cumbersome task that could take days to complete. In order to increase the speed and ease of this process, Embroker has developed a way to put businesses in control and avoid having to play a game of phone tag with their brokers in order to obtain a COI and send it off to their partners or clients.

Using Embroker, businesses can create and obtain digital certificates of insurance almost instantly without ever having to involve their brokers in the process.

We wrote this guide to help you, the reader, understand both the basics of certificates of insurance as well as some more advanced considerations. Our hope is that you walk away from this article a more empowered business leader, with a better understanding of the importance of COIs and what they mean for your company.

If you’d like help, we’d invite you to talk with a broker or get started by creating an Embroker account.

What is a Certificate of Insurance (COI)?

To put it as plainly as possible, a certificate of insurance is a single piece of paper that proves the fact that you have a certain type of insurance coverage. The COI gives a quick summary of all the benefits that are related to the insurance policy you have purchased. All of the most important details related to your insurance police are basically summarized to make them fit onto this single piece of paper.

Listed on the COI will be all of the most important information related to your insurance policy:

your company name
the type of insurance you have and the coverage it provides
expiration dates
policy numbers
the name of your insurer
the limits of your coverage
effective dates

People or companies that are interested in doing business with your company (vendors, distributors, contractors, customers, etc.) will likely ask you for a COI, or proof of insurance, before they begin working with you. This is because they want to make sure that you have the proper liability coverage and protection in place before they enter into a partnership with your company.

Also, a certificate of insurance will commonly state that all certificate holders will be notified if the insurance policy is for some reason cancelled.

It’s also very important to note that while the COI will act as proof of insurance, it does not grant any of the benefits of your insurance policy. This simply means that a COI and your actual insurance policy are not the same thing and regardless of whether or not you have a COI, you still need to have your actual policy on file at all times.

Certificate Holder vs. Additionally Insured

Two terms you will commonly see on any certificate of insurance are

“certificate holder”
“additionally insured”

The certificate holder is the person requesting the proof of coverage.

The additionally insured refers to people or companies other than the policyholder who are covered by the insurance policy in question. Sometimes there are no additionally insured, it really depends on the type of insurance policy and the type of industry or work that the business is involved in. People or companies that are listed as additionally insured on the certificate of insurance are covered by this policy if brought into a suit in relation to the named insured.

Why Do You Need a COI?

Certificates of insurance are important for both you and your partners and customers. For you, as a company that is insured, being able to provide proof of insurance makes it much easier for you to enter into partnerships and grow your business. There are not many companies or customers out there today who are willing to collaborate or work with a company that is uninsured, so from that perspective, being able to obtain a COI when needed is absolutely vital for the success of your business.

There will also be times when you will be the one requesting a COI from another company. For example, if you are a construction company that often hires subcontractors to work on projects with you, then you need to request proof of insurance from these subcontractors. If your subcontracts make a mistake that results in costly property damages and injuries and they do not have any coverage, you can easily be sued for those damages.

Another instance in which you need a COI is when you are audited. A certificate of insurance is needed to avoid paying premium on your general liability and workers’ compensation for your employees sales and payroll.

Who Needs a Certificate of Liability Insurance?

The answer to this question depends on what role your company is playing in cooperation with another company. For example, if you are a construction company that is hiring a subcontractor to work on a project with, then you are going to have to request a proof of insurance from them.

However, if you are in the role of a subcontractor or some other type of business partner, then the company that is hiring you and requesting your cooperation will ask to see proof of insurance from you.

Requesting a certificate of insurance doesn’t have anything to do with trust. It’s all about minimizing risk and making sure that you are covered if something happens to go wrong. Even if you trust the company you are collaborating with and you have worked with them many times, you should still make sure to ask for a COI every time you sign a new contract or agreement with them. This allows you to avoid a scenario in which you are taking unnecessary risks for the the work that your partner company has been hired to perform.

Certificate of Insurance Costs

It actually costs nothing to obtain a certificate of insurance, because this is a complementary service offered by the company that you sold you your business insurance. If your broker is charging you a fee for providing a COI, it’s time to change your broker.

However, if the job in question requires additional coverage which your policy does not meet, then you might have to pay an additional premium to cover those costs. Other than that, your broker should never charge you a fee for providing you a certificate of insurance, no matter how many you need.

How To Obtain a Certificate of Insurance

If you need to request proof of insurance from your insurer, these are the usual steps you’ll need to go through:

  • First, ask your client that is requesting the COI what the minimums and limits of the coverage should be. Get your client’s name, address and tax identification number as well in the case that you have to increase your premium.
  • Call your broker, explain to them what the minimum coverage amount is and that you need proof of insurance. If your policy already meets the requirements, then the broker will contact your carrier to secure the COI. If you need to purchase a rider to increase coverage for the project, your broker will give you the details and the paperwork you will need to fill out and submit.
  • Once you’re all set, your broker will create the COI and send a printed certificate of insurance to you, after which you will have to send it to your client in order to complete your transaction and sign your contract to start your collaboration.

While the process is fairly easy to understand, it must be noted that actually obtaining the COI from your broker could take a few days or even weeks, depending on how easy it is to get a hold of your broker and how quickly he or she is able to complete all the necessary paperwork and provide you with your COI.

Embroker’s Certificate of Insurance (COI) Solution

Wouldn’t it be great if you didn’t have to depend on your broker and wait days to receive your proof of insurance? Embroker allow you to do just that. We enable you to quickly create and request your own COIs right from the platform, potentially saving you days, if not weeks, of unnecessary back-and-forth.

Once a business has moved its policies to Embroker – which is incredibly easy to do as well – it can start creating digital certificates of insurance in just three easy steps:

2.

Select “Certificates” from the top navigation bar.

3.

Fill in the coverage requirements and press “Share.”

That’s literally all you have to do. In many instances, the COI will automatically be available under “Certificate History” and you can see a preview of what it will look like right away.

Our team then puts together the COI and sends both you and your client an industry-standard PDF (ACORD 25) that you will be able to download, print, and store in your Embroker account.

Most COIs can be sent instantly through Embroker and even the most complex COIs will be completed and sent within 24 hours.

On top of that, Embroker also enables your clients to request certificates on their own through our website. We prepare the COI based on your needs – listing coverages, additional insured, special requirements and wording, etc. – and let your clients and partners request the COI independently.

Getting Started

Now that you have a better understanding of the basics of obtaining certificates of insurance, you may be wondering where to go from here. If you need more help or information, you can reach out to our team of expert brokers. If you prefer to get started by transferring your policies to Embroker and securing COIs quickly and digitally, create your Embroker account today.

Embroker is the easiest and quickest way to intelligently manage your business’s entire insurance program. We’re here to help!