Certificate of Insurance (COI): What It Is and Why Your Business Needs to Track It

A Certificate of Insurance (COI) is a summary document issued by an insurance broker or carrier that provides evidence of coverage at a point in time. It is not the insurance policy and it does not create insurance rights. Its purpose is to provide a quick reference to the key parameters of an underlying policy: who the insured is, what coverages are in place, what the limits are, and when the policies expire.

Organizations that collect COIs from contractors to verify insurance requirements are taking a reasonable step. But whether that step actually provides protection depends on whether the COI is read carefully, whether the underlying policy is verified when it matters, and whether someone is tracking expiration dates.

The ACORD 25 Form

The standard form in commercial use is the ACORD 25 Certificate of Liability Insurance, published by ACORD (Association for Cooperative Operations Research and Development). When a contract or procurement process calls for "proof of insurance" or "a certificate," ACORD 25 is almost always the form being requested.

The ACORD 25 covers the following sections:

Commercial General Liability. Shows the policy type (occurrence or claims-made), the per-occurrence limit, damage to rented premises limit, medical expense limit, personal and advertising injury limit, general aggregate limit, and products/completed operations aggregate limit.

Automobile Liability. Shows any auto, hired auto, and non-owned auto coverage with a combined single limit.

Umbrella or Excess Liability. Shows the occurrence and aggregate limits of any umbrella or excess policy sitting above the primary liability layers.

Workers' Compensation and Employers' Liability. Shows the states covered, the workers' comp policy indicator, and the employers' liability limits (bodily injury by accident, bodily injury by disease policy limit, bodily injury by disease each employee).

The bottom portion of the form shows the producer (the broker), the named insured, the insurer for each coverage line with its NAIC code, policy numbers and effective/expiration dates, and the certificate holder.

Certificate Holder vs. Additional Insured

These two designations are frequently confused, and the distinction matters.

The certificate holder is the party who receives the ACORD 25 and is entitled to notice if the policy is cancelled. Certificate holder status gives you a copy of the documentation and, in some cases, a cancellation notice. It gives you no rights under the policy itself.

An additional insured is a party added to the underlying policy by endorsement. Additional insured status means the policy can respond to covered claims brought against that party for liability arising from the named insured's work or operations. This is the actual protection that contract agreements are typically trying to establish.

To confirm additional insured status, you need to see the endorsement itself, not the ACORD 25. The form has a checkbox and a description-of-operations field where additional insured status can be noted, but noting it on the certificate does not create or confirm an endorsement exists on the policy. Certificates have been issued with the additional insured box checked when no endorsement was in place.

CG 20 10 and CG 20 37. The most widely used additional insured endorsements for general liability use ISO's CG 20 series:

• ISO CG 20 10 covers additional insured status for ongoing operations, meaning liability arising while the contractor is actively working.
• ISO CG 20 37 covers completed operations, meaning liability that surfaces after the work is finished but that arises from how it was performed.

Most risk programs require both endorsements. CG 20 37 matters because the failure mode of completed construction or maintenance work can manifest months or years after the contractor has left. Without it, the additional insured coverage expires before many claims arise. Request the actual endorsement pages from the contractor's broker and verify that they reference the current policy number.

What to Check When Reviewing a COI

Named insured. The legal entity named on the policy should match the entity you contracted with. A policy written for "Smith Electrical Inc." does not automatically cover "John Smith DBA Smith Electrical." These are different legal entities, and a claim made against one may not be covered under a policy written for the other.

Policy dates. Confirm that the effective and expiration dates for each coverage line span the period of work on your site. Request renewal certificates before the current ones expire. Standard practice is to request renewal 30 to 60 days before the expiration date shown.

Coverage limits. Compare the limits against your contract's minimum requirements, line by line. An umbrella that brings total limits to $5 million does not compensate for a general liability aggregate that falls short of the contract minimum at the primary level. Review each line separately.

Policy type for general liability. Occurrence policies respond to claims for incidents that occurred during the policy period, regardless of when the claim is filed. Claims-made policies respond only to claims filed during the policy period. If a claims-made policy is cancelled without tail coverage, claims filed after cancellation for incidents that happened during the policy period may not be covered. For third-party risk transfer, occurrence policies are generally preferable.

Workers' compensation coverage. Workers' comp should show coverage for the states where the contractor's employees will be working. Texas is the only state where private employers are not required to carry workers' compensation under state law, though even Texas requires it for certain industries and contract types. Ghost policies, in which a sole proprietor obtains a workers' comp policy that excludes all employees (including themselves) solely to satisfy a contract requirement, are a known fraudulent practice. The policy provides no actual coverage.

What the ACORD 25 Does Not Confirm

The certificate is issued by the broker, not the carrier, and reflects the broker's representation of coverage at the time of issuance. It does not confirm:

• That the policy has not been cancelled or modified since the certificate was issued
• That required endorsements exist on the underlying policy
• That aggregate limits have not been partially or fully eroded by prior claims
• That all workers are actually covered under the workers' comp policy

For contracts involving significant financial exposure or high-hazard work, call the carrier directly using the NAIC code on the certificate to confirm you have the right insurer, then verify by policy number that the policy is active. This is a step most organizations skip for routine contractor work but should consider for anything where a coverage gap would create material liability.

Tracking COIs at Scale

A program involving one or two contractors can be managed with calendar reminders. A program involving dozens of contractors across multiple worksites and several coverage lines will accumulate expiring certificates faster than manual tracking keeps up with.

The most common failure mode is a certificate that expired 30 to 90 days before an incident, where the renewal was never requested because no one was monitoring expiration dates. The original certificate was filed correctly at onboarding. Nobody owned the renewal process.

Systems that track expiration dates and generate renewal requests automatically address this gap. Whether the system is a dedicated contractor management platform, a spreadsheet with calendar integrations, or a third-party COI tracking service depends on program scale. Any systematic approach is better than relying on contractors to proactively submit renewals.

Insurance requirements for contractors vary by industry, contract type, jurisdiction, and the specific risks involved in the work. The information above reflects common commercial and industrial practice. Review minimum insurance requirements with your legal counsel and insurance carrier based on the work being contracted.