What is a certificate of insurance?

A certificate of insurance is a document completed by an insurance company or insurance agency that lists business insurance policy information including company name, policy number, coverage info, and term dates for an insured’s policy or policies.  It is commonly used for commercial policies to show proof of coverage.

Certificate Holder

The certificate holder is shown in the bottom left hand corner of the insurance certificate and reflects the name of the organization or individual that is requesting proof of insurance for the insured.  The certificate holder info requires the holder name and address to be listed.

Additional Insured

An additional insured is the certificate holder that also requests to be listed on the policy as an additional insured and further requests to be notified by the insurance carrier if the policy is to be canceled.  An additional insured has additional rights on the policy that a certificate holder does not have.  There can be an additional fee to list additional insureds on your policy with many carriers.  A box can be checked on each policy to signify that the certificate holder is listed as additional insured.
Sample Certificate
 
A sample certificate is a document that a contractor will send over that shows minimum requirements that a subcontractor must have in order to secure a contract.  The most common policy types, in order, that a contractor will require are general liability, workers compensation or employers liability, automobile liability, cargo liability (for truckers), and umbrella or excess liability.

Parts of a Certificate of Insurance

A standard Acord certificate of insurance has space for some of the most common types of commercial insurance policies.  These common types are shown below in order of how they are listed on the insurance certificate from top to bottom.
  • General Liability
  • Automobile Liability
  • Umbrella or Excess Liability
  • Workers Compensation or Employers’ Liability
  • Blank Space/Other
  • Description of Operations Section
 
This section of the insurance certificate will list other pertinent information of the coverage being listed.  This section can make reference to an additional insured being listed on a specific policy, provide vehicle info on a scheduled auto policy, list information for other policy types, include other endorsements listed on the policy, etc.

Other Common Commercial Endorsements 

Some other common endorsement types that can be listed on commercial policies and indicated on certificates of insurance are shown below.

  • Additional Insured
  • Waiver of Subrogation
  • Primary and Non-contributory wording
  • Any Auto 
  • Hired Auto
  • Non-owned Auto
  • Aggregate Limits Apply Per Project
  • Aggregate Limits Apply Per Location
Certificates of insurance are a very common request in securing a contract for your business.  These contracts require certain minimum limits of liability from subcontractors and typically proof must be provided before you can begin work for that company.  You should pass that information along to your insurance agent before beginning any work to ensure that the cost of purchasing such policies do not outweigh what you are receiving for doing the work.  
The cost of purchasing these policies and endorsements should be considered when you agree to perform a certain service.  A sample certificate of insurance or a list of insurance requirements can be requested up front from the contractor.
If you have any questions as to anything discussed please feel free to give us a call at 704-494-9495.