Certificate of Insurance (COI)
Candlefocus EditorCOIs confirm that an insurance policy is in place and will cover the specified risks, allowing businesses and contractors to protect themselves and their customers from liabilities that could result from unexpected events or losses. It is an important document for both the insured business and the requesting party, as it outlines the scope of coverage being provided and ensures the company is responsible for claims against the policy.
Small business owners and contractors typically require COIs from potential business partners. For example, a contractor may require a COI from a subcontractor before they can begin working on a project. This will provide the contractor with assurance that the subcontractor has adequate liability insurance should any accidents or injuries occur while they are working on the project.
It is important to carefully review a COI to make sure the information contained is correct and the policy is still active. Be sure to review the policy coverage dates to ensure they are current and the limits of the policy are sufficient to cover any potential risks. Failure to review a COI could lead to costly liabilities, should an incident occur.
In conclusion, a certificate of insurance (COI) is a document issued by an insurance company or broker that serves to prove the existence of an active insurance policy. It is recommended that small business owners and contractors obtaining a COI review the policy closely to ensure the policy is active and the coverage limits are sufficient for the potential risks. When properly reviewed, having a COI in place can provide businesses and contractors with peace of mind knowing they are protected from potential liabilities.