Every small business owner, startup, independent contractor, and entrepreneur knows they need to have a business insurance policy to safeguard their finances and protect their companies and professions from liability risks. But how do you prove you are insured if you must when forging a new partnership or signing a contract with a customer?

The answer is you need a certificate of liability insurance (COI). Also referred to as a proof of insurance document, a COI is like an identification card. It essentially is a one-page digital document that summarizes your business insurance coverage. It includes what you are covered for and the amount of coverage, the policy expiration date, who the insured is (that’s you), and your business’s address. You can also add an additional insured to your policy and COI if required (an additional insured is a person or organization you add to your policy that extends your coverage to them. For example, your commercial property landlord).

Business owner holding certificate of insurance

A COI may be required any time you hire a third party to do work on your property. Or, if you’re doing work or hosting an event at another venue or property that is not your own, you may be asked by that property owner to show proof that you are insured. Think of it this way: it’s proof that you can cover the cost of a liability claim should the unexpected happen where an employee, customer, or another entity could get hurt or suffer some kind of financial loss.

What Kinds of Small Businesses Need a Certificate of Insurance?

Whether you are an independent contractor, a restaurant owner, or an accountant who manages finances for other businesses or individuals, it is wise to have a COI on-hand to provide any partners or customers upon request.

It comes down to your needs and your customers’ needs. In general, any small business or independent professional providing a service that has the potential for liability losses may be asked to provide a COI. That may include submitting a proposal or bidding contract to a partner or customer to do work for them, as it may be a requirement for a proposal, or it can give you an edge over your competitors vying to win a contract. Any type of small business needs to have a COI depending on its circumstances.

If you request a COI from a third party, it’s worthwhile to contact the broker who issued the document to verify that all the document details are correct and valid.

Certificate of Insurance - Sample Template
Certificate of Insurance Template - Zensurance

How Do You Get a Certificate of Insurance?

Your licensed insurance broker can provide you with a COI if you need it. Your COI should include the following information:

  • The name of the brokerage and its address that issued the COI
  • The name of your insurance company
  • Your name and the address of your small business or the organization that names you as an additional insured to their policy
  • Your insurance policy number and its expiration date
  • A description of the coverages on your policy

Is a Certificate of Insurance the Same as a Business Insurance Policy?

No, a COI is not the same as a formal business insurance contract between you and your insurance company. It is a one-page document that proves you are insured should you need to provide it to a partner, customer, or financial institution.

Do You Have the Right Type of Insurance to Protect Your Small Business?

Business insurance policies are typically one-year contracts between a business owner and an insurance company. They must be renewed annually to ensure continuous coverage. But a lot can change in 12 months. That’s why it’s vital to work with a licensed insurance broker who can serve as your trusted advisor, review your liability risks and existing coverage, recommend ways to enhance your coverage if necessary and reduce the liability risks you may face.

Whether your policy is due for renewal, if you’re considering switching to another insurance provider, or if you’re seeking a small business insurance policy for the first time, get a free quote from Zensurance and let our licensed brokers do the shopping for you. Our friendly broker team strives to find our customers the coverages they need at the most competitive price.

Get my Certificate of Insurance