What is a Certificate of Insurance? It is a document issued by an insurance company or broker and provides evidence of your coverage

Certificate of Insurance - What you need to know

Written by Simon Taylor


A Certificate of Insurance is a document that provides evidence of your insurance. It typically outlines the key covers provided, policy numbers, insurance company, amount of cover offered, and is provided either by your insurance broker or insurer.

When are Certificates of Insurance required?

A Certificate of Insurance might be requested in various situations, such as when entering into a contract or agreement. For example, contractors or service providers may be required to provide a Certificate of Insurance to demonstrate that they have the necessary business insurance to protect against potential risks or liabilities associated with their work.

Many companies will not engage with a third-party unless they are able to demonstrate they have purchased minimum amounts insurance. Depending upon what products and services you are planning to provide to your client, they may request you arrange minimum amounts of cover for:


Why Certificates of Insurance are important?

A Certificate of Insurance (COI) provides the assurance that you purchase enough cover and gives your client the knowledge they have an insurance policy to claim against should something go wrong where they would seek to claim damages against your business.

They serve as a useful tool in risk management because they serve as tangible proof the business or individual has sufficient insurance in place. Many contracts will stipulate the need for insurance coverage to protect all parties involved. COIs provide a standardised way to communicate and verify compliance with these contractual requirements.

COIs assist in managing liability by clearly outlining the cover that is currently in force. This information is valuable to each counterparty in understanding how potential risks are mitigated and how liability maybe distributed among parties involved.

Additionally, there are certain industries or regulatory bodies that have specific insurance requirements. COI’s help businesses demonstrate compliance with these regulations and maintain good standing within their respective industries.

Not to mention the COI’s can build trust between parties when there is a significant difference in size. It demonstrates a commitment to responsible risk management and financial responsibility. Companies that can’t obtain the required levels of insurance from reputable carriers with an ‘A rating’ from AM Best should be avoided.

How to obtain a certificate of insurance?

Speak to your insurance broker in the first instance, they will be able to provide you with a letter that will meet the requirements of your counterparty or regulator. If you don’t have cover in force – give one of our experts a call or a arrange a call-back to discuss your requirements.

Why shouldn’t you share your schedules and policy wordings with a third-party?

It is advisable that you do NOT share your insurance schedules and policy wordings with a third-party which may later seek to claim against you. You will have a legal obligation to protect your insurance companies’ interests, if you assist the bringing of a claim against your insurance cover – you could find your insurance company later seeks to deny a claim leaving you without cover.

It's worth remebering that Certificates of Insurance not guarantees

They will typically include statements such as:

The above information is correct at the time of writing and is provided to you as a matter of information only. It has not been prepared for, and may not meet the requirements of, any other party. Any third party to whom it is supplied should therefore take such steps as it considers necessary to satisfy itself that its own requirements have been met.

This Certificate of Insurance does not make the person or organisation to whom it has been issued an additional Insured, nor does it modify in any manner the Contract of Insurance between the Policyholder and the insurer. The policy cover will be the course subject to the Terms and Conditions.

Therefore, whilst Certificates of Insurance are commonly requested by counterparties around the world, the letter does not provide a guarantee to the client that your insurance would respond to the specific situation that later occurs whereby that may seek to claim damages against you.


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About the author

Simon Taylor is a respected senior industry professional and a Chartered Insurance Broker with over 20 years’ of experience in the commercial insurance sector as an underwriter, broker and director.