What Is A Certificate Of Insurance

A certificate of insurance (COI) is a one-page document that summarizes the key details of an active insurance policy. It proves that a named insured holds a specific type and amount of coverage at a specific point in time. A landlord requesting proof before signing a lease, a general contractor requiring coverage documentation from a subcontractor, or a lender asking for evidence of property coverage - all of these parties are asking for a certificate of insurance.

The certificate is not the policy. It does not grant coverage. It does not modify the policy. It is evidence that coverage exists.

Key Takeaways

• Certificates of insurance are issued on ACORD 25 (general liability, auto, umbrella), ACORD 27 (personal property), or ACORD 28 (commercial property). The form type depends on the coverage being documented.
• The certificate lists who is insured, what coverage they carry, the policy number, the coverage limits, and the effective and expiration dates.
• ACORD 25 includes a printed disclaimer: the certificate "does not amend, extend, or alter the coverage afforded by the policies." This language is not optional - it appears on every standard ACORD 25.
• A certificate holder is a party that receives the certificate. An additional-insured has actual coverage rights under the policy. These are different statuses.
• The certificate is valid only for the current policy period. A renewed policy requires a new certificate.
• An insurance-producer or their agency staff issues the certificate on behalf of the named insured. The named insured does not issue it directly.

What a Certificate of Insurance Contains

ACORD 25: The Standard Liability Certificate

The ACORD 25 is the most widely used certificate form. It covers general liability, commercial auto, umbrella/excess liability, workers' compensation, and employers' liability. The ACORD 25 contains the following fields:

Producer section: Name and address of the issuing agency. The insurance-producer who signed the certificate is legally responsible for its accuracy.

Insured section: Full legal name and address of the named insured - the entity or individual that holds the policy.

Coverage sections: One row per coverage type. Each row shows:

• Insurance company name and NAIC number
• Policy number
• Policy effective date
• Policy expiration date
• Coverage limits (per occurrence and aggregate for GL; combined single limit for auto)

Certificate holder section: Name and address of the party requesting the certificate. The certificate holder receives a copy of the certificate. They do not receive coverage rights from this status alone.

Additional insured and subrogation waiver checkboxes: These boxes indicate whether the certificate holder has been added to the policy as an additional insured or whether the insurer has agreed to waive subrogation rights against the certificate holder. These are only valid if the underlying policy has the corresponding endorsements in place.

Description of operations box: Free-text field used to note project-specific information, contract references, or endorsement language. Many third-party requestors - particularly general contractors and municipalities - require specific language in this box.

Cancellation notice section: States the insurer's obligation to notify the certificate holder if the policy is cancelled. ACORD 25's standard language says the insurer "will endeavor to" provide 30 days' notice. This is a best-efforts statement, not a legally binding commitment. Binding cancellation notice requires a policy endorsement.

ACORD 27 and ACORD 28: Property Certificates

ACORD 27 covers personal lines property (homeowner's, renters, dwelling fire). ACORD 28 covers commercial property. These forms are used when a lender or landlord needs proof of property insurance - for example, a mortgage lender requiring evidence of homeowners coverage at closing.

ACORD 28 includes:

• Building limit and contents limit
• Coinsurance percentage
• Deductible amounts
• Whether the policy is replacement cost or actual cash value
• Loss-payee information (the lender or mortgagee's name and loan number appear in this field)

The loss-payee is a party with a financial interest in the insured property - typically a lender or lienholder. Unlike an additional insured, a loss payee's rights are tied to the property value, not to liability claims. If the building burns, the loss payee's name appears on the claim check up to their outstanding loan balance.

What a COI Does NOT Do

This is where most misunderstandings originate.

A COI does not create coverage. If the certificate says "General Liability: $1,000,000 per occurrence" but the policy was cancelled the week before, the certificate is worthless. Coverage comes from the policy, not from the certificate.

A COI does not modify the policy. Checking the "Additional Insured" box on ACORD 25 means nothing if the policy does not have a corresponding additional insured endorsement. ACORD 25's disclaimer is explicit: the certificate "does not amend, extend, or alter the coverage afforded by the policies." This language has been on the ACORD 25 form since the 1970s.

A COI is not the same as being added as an additional insured. A certificate holder and an additional-insured are two completely different statuses. A certificate holder receives documentation. An additional insured receives actual coverage rights - the right to tender a claim, receive defense, and recover indemnification under the named insured's policy. That coverage comes from a policy endorsement, not from the certificate.

A COI does not guarantee future coverage. The certificate shows coverage as of the date it was issued. If the policy cancels or lapses after the certificate is issued, the certificate holder has no legal recourse through the certificate itself.

A 2023 review of construction-related E&O claims found that 23% involved certificates that misrepresented additional insured status - showing the additional insured checkbox as checked when no endorsement existed on the policy. The dollar exposure in those claims ranged from $45,000 to $2.8 million.

Who Requests COIs and Why

Landlords

Commercial landlords almost universally require tenants to provide a certificate of insurance before occupancy. The lease specifies minimum coverage requirements - typically $1 million per occurrence general liability and property coverage on business personal property. The landlord is named as certificate holder and, in most commercial leases, as an additional insured. The certificate proves the tenant has met the lease insurance requirements.

General Contractors

General contractors (GCs) require certificates from every subcontractor before allowing them on a job site. The GC's contract typically specifies required coverage types, minimum limits, and endorsement requirements (additional insured, waiver of subrogation, primary and non-contributory). A subcontractor without a current, compliant certificate cannot work on the project. GCs on large commercial projects may manage hundreds of certificates per project across dozens of subcontractors.

Lenders and Financial Institutions

Lenders require evidence of property insurance as a condition of mortgage or commercial loan agreements. The loan agreement typically requires that the lender be named as a loss-payee on the property policy. An ACORD 28 certificate naming the lender in the loss-payee field satisfies this requirement. Lenders verify the certificate at closing and often annually thereafter.

Project Owners and Municipalities

Public and private project owners - municipalities, school districts, universities, commercial developers - require contractors and vendors to maintain specified insurance as a condition of contracts. A municipality hiring a contractor to repave roads may require $2 million general liability, $5 million umbrella, and workers' compensation. The vendor submits a COI naming the municipality as certificate holder and additional insured before any work begins.

Large Retailers and Vendors

Major retailers - Home Depot, Walmart, Amazon's third-party seller programs - require certificate submission from vendors, suppliers, and contractors. Walmart's supplier requirements include minimum $2 million commercial general liability and $5 million umbrella with Walmart named as additional insured. These requirements are enforced through vendor management platforms that track certificate compliance.

Certificate Holder vs. Additional Insured: The Critical Difference

The most common point of confusion is the distinction between the certificate holder and an additional insured.

If a general contractor is listed only as certificate holder and a worker is injured on the job site and sues the GC, the GC cannot tender that claim to the subcontractor's insurer. The certificate holder status gives no coverage rights. If the GC had been added as additional insured with a CG 20 10 endorsement, the analysis is entirely different.

How Long Is a Certificate of Insurance Valid?

A certificate of insurance is valid for the policy period shown on the certificate. A general liability policy with an effective date of January 1, 2026, and an expiration date of January 1, 2027, produces a certificate valid through January 1, 2027. When the policy renews, a new certificate must be issued for the new policy period.

There is no perpetual certificate. Certificates do not automatically transfer to renewal policies. Agencies must re-issue certificates when policies renew. For agencies with hundreds of certificate holders, this renewal process is the highest-volume administrative task in the annual calendar.

When You Need a New Certificate

A new certificate is required whenever:

• The policy renews. The old certificate shows the expired policy. The new policy requires a new certificate with the updated policy number and dates.
• Coverage changes mid-term. If the named insured increases limits, adds a coverage line, or removes a carrier, the certificate no longer accurately represents the coverage in force.
• A new project, lease, or contract requires documentation. Each new contractual relationship typically requires its own certificate naming the new party as certificate holder (and, if required, as additional insured).
• The certificate holder requests an updated certificate. Some certificate holders - particularly large GCs and municipalities - verify certificates annually and require fresh documentation.
• An endorsement is added. If the named insured adds an additional insured endorsement, a waiver of subrogation, or a primary and non-contributory endorsement, the certificate should be reissued to reflect the new status.

How the Issuance Process Works

An insurance-producer or agency staff member issues the certificate on behalf of the named insured. The named insured does not have authority to issue their own certificate directly. The process:

1. The named insured requests a certificate (typically by email or through a client portal), specifying who needs to be named as certificate holder and any special requirements from a contract.
2. The agency staff reviews the policy to confirm coverage types, limits, and any required endorsements are in place.
3. The agency issues the certificate through the AMS or directly through ACORD's online system.
4. The certificate is delivered to the certificate holder (and a copy retained in the agency file).

Manual certificate issuance takes 15 to 30 minutes per certificate. Automated issuance through an AMS with COI functionality takes 2 to 5 minutes. For agencies processing hundreds of certificates monthly, this time difference is significant.

BrokerageAudit's COI Manager automates the issuance process, verifies that policy endorsements match certificate representations before issuance, and stores the documentation trail needed when disputes arise. For agencies issuing high volumes of certificates, see #126 for the full COI workflow guide and #128 for handling certificate renewal season.

Frequently Asked Questions

Is a certificate of insurance proof of insurance?

A certificate of insurance is evidence of insurance - not proof in the legal sense. It shows that a policy existed on the date the certificate was issued. It does not guarantee coverage will continue, and it does not prove the policy was in force on any date other than the issuance date. For legal proof of insurance at a specific point in time, the policy declarations page or a certified copy of the policy is a stronger document.

Who issues a certificate of insurance?

An insurance producer (licensed agent or broker) or authorized agency staff issues the certificate on behalf of the insured. The insured does not issue their own certificate. The agency that manages the policy is responsible for issuing the certificate and is legally accountable for its accuracy. If an agency issues a certificate that overstates coverage, the agency faces E&O exposure.

How do I read a certificate of insurance?

Start with the insured name (box 3 on ACORD 25) - confirm it matches the contracting entity. Check the policy expiration dates - a certificate with an expired policy is useless. Check the coverage limits against your contract requirements. Check whether the "Additional Insured" box is checked and whether the certificate holder name is in the certificate holder field. If you need proof of additional insured status, the endorsement number (not just the checked box) should appear in the description of operations.

Can a certificate of insurance be faked?

Yes. Certificate fraud occurs when someone creates a fake certificate showing coverage that does not exist. It can also occur when a real certificate is altered to show higher limits or different coverage than the policy actually carries. Verification requires checking directly with the issuing agency or using a certificate verification service. Some states - including New York and California - have enacted regulations against fraudulent certificate issuance.

Does a certificate of insurance expire?

A certificate expires when the policy it documents expires. If the policy renews annually, a new certificate must be issued for each renewal period. The expiration date on the certificate is the policy expiration date - the certificate does not have a separate expiration date. Some certificate holders set reminders for 30 to 60 days before the policy expiration to request a renewal certificate before the current one lapses.

What is the difference between ACORD 25, ACORD 27, and ACORD 28?

ACORD 25 is used for liability coverages - commercial general liability, commercial auto, umbrella/excess, and workers' compensation. ACORD 27 is used for personal lines property coverage (homeowners, renters, dwelling fire). ACORD 28 is used for commercial property coverage. The form used depends on what coverage is being documented. A lender requiring proof of a commercial building's property insurance gets an ACORD 28. A general contractor requiring proof of a subcontractor's liability coverage gets an ACORD 25.

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.

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