What is a Certificate of Insurance?
A certificate of insurance (COI) is a document. It certifies that the certificate holder has an active insurance policy.
Let’s break down these concepts and learn about the use of Certificates of insurance.
- A Certificate of Insurance is the document that proves there’s an active insurance policy, a Certificate Holder is a person who owns the certificate for the policy.
- The Certificate Holder is not necessarily the same person as the insured, given that Certificates of Insurance are also requested for additional insureds.
- The party who owns the insurance policy is called the policyholder.
There are different forms of certificates of insurance. However, Accord 25 forms are the most associated with COIs.
What is an Accord 25 form?
The Accord 25 forms are one of the most common forms of Certificate of Insurance. It’s a one-page document that certifies that the certificate holder possesses active business liability insurance coverage.
What information does a Certificate of Insurance have?
Apart from the name of the policyholder, any certificate of insurance should contain:
- The Insured’s Mailing Address
- The Policy Dates
- The Insurance Policy Coverage Limits
- Additional Insureds & Professional Liabilities
- Information About the Insurance Company
When someone requests a COI, they become a Certificate Holder and will have to get notifications of any policy cancelations or modifications.
Are there different types of COIs?
Yes, depending on the requirements and the type of insurance policy available. The three types of COIs you can encounter are:
- Certificate of Liability Insurance
Used by companies involved in business transactions that require liability insurance.
- Certificate of Workers’ Compensation Insurance
Used for construction jobs or other potentially hazardous projects that require Workers’ Compensation Insurance.
- Certificate of Car Insurance
Banks or lenders usually request certification if they suspect that the car loan borrower does not have adequate insurance coverage.
How much do COIs Cost?
Certificates of Insurance should not cost anything. It is a complimentary service that the insurer offers.
Is having a COI the same as having an insurance policy?
Absolutely not! An active insurance policy is required to have a Certificate of Insurance that gives proof of that coverage.
There are instances, however, where there is a Certificate of Insurance, and no insurance coverage is active. These COIs with no policy backing them up are usually fake. That is why it is essential to check that the certificate has the information on an insurance company.
What we do at SmartCompliance
SmartCompliance is a compliance tracking system. It tracks insurance policies and tracks your compliance rates, and more importantly, it is capable of issuing Certificates of Insurance.
One of the key features of our software is Optical Character Recognition software OCR, which allows it to read entire Certificates of Insurance potentially. OCR allows SmartCompliance to recognize characters and potentially digitize to edit or print the entirety of your compliance documents.
See SmartCompliance in action by scheduling demo.
