What Is A Certificate Of Insurance When It Comes To Small Businesses?

It’s always a good idea to make sure your small business is covered in case of an accident or other kind of disaster. A certificate of insurance is just one way to do this. Here’s what you need to know about COI for small businesses:

What is a COI?

Like a car, home, and health insurance, a small business owner needs to have a certificate of liability insurance to get coverage from their insurer. Most small business insurance certificates have sections describing the liability insurance they carry. These include general liability, commercial auto, umbrella, and workers’ compensation. The term “insured” refers to a person, the name of a business, or the additional insureds.

Coverage and limits for the general liability section include products and completed operations, exposure to premises and operations, and indirect/contingent exposure. Property damage and bodily injury are covered by auto liability. A workers’ compensation policy covers injuries and illnesses up to a certain limit, whereas umbrella coverage provides excess coverage.

The COI is issued by an insurance company and contains information about your business, including its name, address, owners, and other relevant information. It’s intended to protect you and your company from financial loss due to an accident or any other mishap that could cause injury or damage.

Why Do You Need A Certificate Of Insurance?

It is difficult or impossible for most businesses or contractors to get contracts without a certificate of insurance. Employers do not want to assume the costs associated with accident or incident claims caused by companies or people they hire. This includes medical care, repairs, legal fees, and other costs.

Certificates of insurance prove that the hired business or contractor is responsible for covering the risks. With insurance, a certificate is easy to prove that you are insured without carrying around a lengthy insurance contract.

Is A Certificate Of Insurance Required For All Types Of Businesses?

You need to consider the needs of your business and your customers. Nevertheless, most businesses do. A COI may likely be required if a company or individual provides services that may lead to high liability losses. Catering companies, tech companies, contractors, and cleaning firms fall into this broad category.

Where Can Businesses Obtain Certificates Of Insurance?

When you purchase business liability insurance, your insurer will provide you with a certificate of insurance. Business liability insurance aims to protect the financial interests of the companies and business owners who purchase it.

COIs typically last five years. Keep it indefinitely since you never know when a problem could arise. Proof of the COI will help resolve any issues.


Small businesses should be willing to pay to establish credibility and ensure that their brand isn’t tarnished by failures to meet the minimum requirements of the law. Perhaps most importantly, it shows that the business has proper insurance coverage in the case of an accident. It also assures any customers or clients of the company for which they’re providing goods or services that negligence won’t lead to financial ruin.