Certificate of Insurance: What It Is and What It Isn't

A Certificate of Insurance — commonly referred to as a COI or ACORD certificate — is a standardized form created by the non-profit organization ACORD (Association for Cooperative Operations Research and Development). ACORD develops uniform templates used throughout the insurance industry by carriers, agents, brokers, adjusters, and third-party administrators. These forms are widely used for insurance applications, but most frequently to provide proof of insurance.

It is essential to understand that a COI is not an insurance contract and does not grant any rights under an insurance policy. Nearly all COIs include a disclaimer stating that the document is for informational purposes only and does not constitute a legally binding agreement. It is simply a fillable form used by agents and carriers to verify that coverage exists.

What a COI Should Include

• Date of Issue: The date the certificate was generated. A COI older than 30 days should generally not be accepted.
• Producer: The name, address, and contact information of the agent or broker of record for the policies listed.
• Insured: The name and address of the policyholder — the individual or entity that holds the insurance.
• Insurer(s): The insurance carrier(s) providing the coverage shown on the certificate.
• Type of Insurance: The standard ACORD form lists common lines of coverage. This section identifies which coverages are in force.
• Policy Number and Effective/Expiration Dates: These dates must reflect current, active policy periods. A COI showing an expired policy should not be accepted.
• Description of Operations: This optional section is used only when specific details must be disclosed — such as coverage applying to a particular location, additional insured status, or special provisions required by contract.
• Certificate Holder: The name and address of the entity requesting the certificate. Being listed as a certificate holder does not grant rights or coverage.
• Cancellation Clause: Information regarding whether and how the certificate holder will be notified if a policy is cancelled.
• Authorized Signature: A valid COI must include the signature of an authorized representative of the issuing agency. A certificate without a signature should not be accepted.

Why Certificates of Insurance Matter

COIs are essential in many business relationships. Partners, vendors, lenders, landlords, lessors, and finance companies often require proof of insurance to protect their interests in operations, contracts, buildings, equipment, and other exposures.

However, when business owners receive COIs from vendors, contractors, or service providers, they must understand that a COI alone does not transfer risk. While verifying that a vendor carries insurance is critical, additional risk-transfer mechanisms — such as contractual indemnification language and proper additional insured endorsements — are necessary to avoid unintended and undue liability.

Our team is available to assess your potential exposures and provide guidance, including sample COIs and recommended risk-transfer strategies tailored to your operations.