If you are a contractor, you will spend a significant amount of time dealing with certificates of insurance — requesting them from subcontractors, providing them to clients and general contractors, and managing the additional insured requirements that come with every contract.
Here is what you need to know.
What Is a Certificate of Insurance?
A certificate of insurance (COI) is a one-page document that summarizes the key details of an insurance policy:
- The insured's name and address
- The insurance carrier
- Policy numbers
- Coverage types and limits
- Policy effective and expiration dates
- The certificate holder (the party requesting the certificate)
- Any additional insured endorsements
A COI is evidence that insurance exists — it is not the policy itself, and it does not modify the coverage in any way.
What a COI Does NOT Do
It does not guarantee coverage. A COI is a snapshot of coverage at the time it was issued. If the policy is cancelled or lapses after the COI is issued, the certificate holder has no automatic protection.
It does not create additional insured status. Simply being listed as the certificate holder does not make you an additional insured. Additional insured status requires a specific endorsement to the policy.
It does not modify the policy. Any statements on the COI that conflict with the actual policy terms are superseded by the policy. The COI is informational only.
Additional Insured Status: What It Means
When a general contractor or property owner requires you to name them as an additional insured on your policy, they are asking to be covered under your GL policy for claims arising from your work.
What additional insured status provides:
- The additional insured can make a claim directly against your policy
- Your policy defends the additional insured against covered claims
- The additional insured's own policy is not the primary coverage for claims arising from your work
How to add an additional insured:
Contact your agent and request an additional insured endorsement naming the specific party. Your agent will issue an updated COI reflecting the endorsement.
Types of additional insured endorsements:
- Ongoing operations: Covers the additional insured for claims arising from your current work
- Completed operations: Covers the additional insured for claims arising from your completed work (often required for a specified period after project completion)
The ACORD 25 Form
Most COIs use the ACORD 25 form — a standardized format developed by the Association for Cooperative Operations Research and Development. Knowing how to read an ACORD 25 helps you verify that a subcontractor's coverage meets your requirements.
Key sections to review:
- Section D (General Liability): Check the occurrence and aggregate limits
- Section E (Automobile Liability): Check the combined single limit
- Section F (Workers Compensation): Verify coverage and employer's liability limits
- Description of Operations: Check for additional insured endorsements and any special conditions
Managing COI Requirements as a Contractor
Requesting COIs from subcontractors:
- Require COIs before any subcontractor starts work
- Verify that the coverage meets your contract requirements
- Check expiration dates — a COI for a policy that expired last month is worthless
- Verify additional insured status if required by your contracts
Providing COIs to clients and GCs:
- Contact your agent to request a COI — they can typically issue one within 24 hours
- Provide the certificate holder's name and address exactly as required
- If additional insured status is required, confirm the endorsement is in place before the COI is issued
- Keep copies of all COIs you provide
Tracking expiration dates:
Set calendar reminders for policy expiration dates — both your own and your subcontractors'. An expired policy means no coverage.
The Bottom Line
Certificates of insurance are a routine part of contractor business — but they require attention to detail. A COI that does not reflect the required coverage, or that shows an expired policy, provides no protection.
Talk to a RightQuote advisor about contractor insurance, or explore business insurance options.
Part of the Contractor Insurance Guide.