According to a report by Deloitte, 50% of small business owners identified loss avoidance as their primary reason for purchasing insurance, while 44% pointed to financial vulnerability as a key concern. This highlights the importance of being insured and being prepared to demonstrate your coverage when it matters most.
Running a business means balancing opportunities with risks. From accidental property damage to unexpected injuries, liability risks are a constant part of operations. If you're not properly prepared, these risks threaten your bottom line and jeopardize relationships with clients, landlords, and business partners.
While having insurance is essential, it’s not enough on its own. You need proof of coverage when clients or partners request it. Without this proof, businesses risk losing opportunities, failing to meet contractual requirements, and damaging professional relationships.
That’s where a Certificate of Liability Insurance (COI) becomes indispensable. A COI is more than just a document—it’s your business’s proof of protection and professionalism.
In this post, we’ll walk you through the essentials of a Certificate of Liability Insurance—what it is, why it’s important, and how it can protect your business.
What is a Certificate of Liability Insurance (COI)?
A Certificate of Liability Insurance (COI) is a one-page document that proves your business has active liability insurance. It provides a clear and concise snapshot of your coverage, reassuring clients, landlords, and business partners that you’re financially protected against risks such as accidents, property damage, or liability claims.
While a COI doesn’t modify your coverage or grant legal rights to the certificate holder, it serves as a quick and reliable way to show that your business is insured.
Why Do You Need to Show Proof of Liability Insurance?
You might wonder why people ask for proof of liability insurance. The reason is simple—people want to know that your business can handle financial risks if something goes wrong.
A Certificate of Liability Insurance (COI) acts as proof that you have the coverage to protect both your business and those you work with. Here are some common situations where showing proof of insurance is necessary:
- Signing a client contract: Many clients require you to show a COI before signing a contract. They want to ensure that if an accident occurs—like property damage or an injury—you have insurance to cover the costs, not them.
- Leasing commercial property: Landlords often ask for proof of liability insurance when you rent office or warehouse space. This protects both you and the landlord from financial losses, such as property damage or lawsuits.
- Applying for licenses or permits: Certain professions, such as contractors or real estate agents, must carry liability insurance to obtain or renew licenses. A COI helps you meet these legal requirements.
- Bidding on projects: Some projects require proof of insurance during the bidding process. Sharing your COI early can give you an edge over competitors and demonstrate professionalism.
- Working as an independent contractor: Staffing agencies or businesses often ask independent contractors to show a COI. This ensures you’re financially prepared to handle liability claims without dragging them into disputes.
For example, imagine you’re a contractor hired to renovate a building. If an accident damages valuable equipment, the client wants to know if your insurance will cover the costs. Without a COI, you may lose the contract or the client’s trust.
What Information is Included in the Certificate of Insurance?
A Certificate of Liability Insurance (COI) provides essential information to ensure everyone involved understands the type and level of protection your business carries.
Here’s what a COI typically includes:
- Your business details: Includes the legal name of your business and its contact information, so the certificate is clearly tied to your company.
- Insurance company information: Lists the name of your insurance provider along with their address and contact details, showing who issued the policy.
- Policy number: Provides a unique identifier for your insurance policy, making it easy for clients or partners to verify its authenticity.
- Types of coverage: Specifies the types of insurance you carry, such as general liability, workers' compensation, or professional liability coverage.
- Policy limits: Outlines the maximum amount your insurance will pay for different types of claims, including per-incident and total coverage limits.
- Coverage dates: Displays your insurance policy's start and end dates, ensuring the policy is active during the business relationship.
- Certificate holder details: Includes the name of the person or business requesting the COI, verifying that it’s explicitly issued for their needs.
- Additional insured or waiver of subrogation (if applicable): Indicates if the certificate holder is covered under your policy or if specific rights have been waived.
For example, if you’re working on a construction project, your COI might state that your general liability insurance covers property damage claims up to $1 million per incident. This reassures the project owner that you’re prepared to handle potential risks.
How Do You Get a Certificate of General Liability Insurance?
Getting a COI is quick and easy, and ensures you’re prepared for any business opportunity that comes your way. Here’s a step-by-step process to get your COI:
1. Purchase a General Liability Insurance Policy
- If you don’t already have coverage, start by buying a general liability insurance policy. This type of insurance protects your business against claims of bodily injury, property damage, and more.
- Work with a trusted insurance provider, like TWFG Khan Insurance, to find a policy tailored to your specific business risks.
2. Request the COI From Your Insurance Provider
- Once you’ve purchased the policy, contact your insurer or agent and ask them to issue a COI.
- Most insurance companies, including TWFG Khan Insurance, provide COIs at no extra cost as part of your coverage, ensuring quick and hassle-free access whenever needed.
3. Access the COI Online
- Many insurers offer digital access to COIs through online portals. You can log in, download, and print your COI whenever you need it.
- Instant access ensures you’re always prepared to provide proof of insurance for contracts, projects, or client requests.
4. Provide Details About the Certificate Holder
- If the COI is being issued for a specific client, landlord, or partner, you must provide their name and address to your insurer. This will ensure that the COI is customized to their needs.
5. Update Your COI When Needed
- If your coverage changes—such as adding a new type of insurance or increasing your policy limits—you’ll need to request an updated COI. This ensures that all information on the certificate is accurate and reflects your current coverage.
For example, if you’re a contractor working on a new project, you can request a COI with the client’s name listed as the certificate holder. This shows the client that your insurance specifically protects them in case of liability issues during the project.
How Much Does a Certificate of Liability Insurance Cost?
A Certificate of Liability Insurance (COI) is usually free for businesses with an active insurance policy, and providers like TWFG Khan Insurance ensure you can easily access it as part of their comprehensive service.
Here’s a breakdown of what you need to know:
- No cost for standard COIs: If you have a general liability insurance policy, your insurer will typically provide the COI at no additional charge. You can request multiple copies as needed for your clients, landlords, or partners.
- Cost for additional insureds: While the COI itself is free, adding an “additional insured” to your policy might involve an extra fee. This depends on your insurer and the specifics of your policy. Clients often request additional insureds to ensure they’re also protected under your policy.
- Policy-related costs: Although the COI is free, your underlying insurance policy has a cost. The price of a general liability insurance policy depends on factors like:some text
- The size of your business.
- The type of work you do (e.g., construction or consulting).
- The level of coverage and limits you choose.
- Digital access at no charge: Many insurers offer COIs through online portals, allowing you to download and share certificates instantly without any additional expense.
For example, if you’re a contractor working on a large project and your client requests to be added as an additional insured, your insurer might charge a small fee to update your policy and issue a revised COI.
However, if no changes to your policy are required, your COI will remain free.
Why Choose TWFG Khan Insurance for Your Liability Insurance Needs?
At TWFG Khan Insurance, we understand the unique risks and challenges your business faces. Whether you operate in the maritime, oil & gas, or construction industry, having the right liability coverage—and proof of it—is essential for protecting your operations and building trust with your clients.
Here’s why partnering with us is the right choice:
- Tailored insurance solutions: We provide customized liability policies designed to address the specific risks of your industry, ensuring your business has the coverage it needs.
- Expert guidance: Our team has years of experience working with businesses in high-risk industries. We help you navigate insurance requirements, making sure you understand your coverage and how to use it effectively.
- Quick and easy access to COIs: When you choose TWFG Khan Insurance, we make it simple to obtain your Certificate of Liability Insurance (COI). You can request a COI anytime, and we’ll ensure it’s processed quickly so you’re always prepared to meet client or partner requirements.
- Direct access to top-rated carriers: We work with leading insurance providers to secure competitive rates and reliable coverage for your business. You can trust us to find the best options to protect your operations.
- 24/7 claims support: If something goes wrong, we’re here to help. Our team provides round-the-clock claims support so you can resolve issues quickly and get back to running your business.
When it comes to liability insurance, TWFG Khan Insurance is your trusted partner. We don’t just provide policies—we deliver peace of mind, helping you safeguard your business and confidently seize new opportunities.
Get a quote with us today to learn how TWFG Khan Insurance can protect your business and make obtaining a COI effortless.
