What is a certificate of insurance, and how do I get one fast?

What a certificate of insurance shows

The ACORD 25 Certificate of Liability Insurance is the standard form for liability coverage. It summarizes coverage types, policy numbers, effective and expiration dates, and limits for general liability, auto liability, umbrella, workers’ compensation and other lines you carry. Property coverage is usually evidenced on a different form, the ACORD 28.

A certificate is informational. As guides to the ACORD 25 explain, the form does not create, modify or extend coverage. The policy itself controls what is covered.

Certificate holder versus additional insured

These two terms are often confused, and the difference matters.

• Certificate holder: the person or company receiving the certificate. Being listed confirms you have coverage, but gives them no rights under your policy.
• Additional insured: a party added to your policy by endorsement, who can be covered for claims arising from your work. Clients and landlords frequently require this.
• Additional insured status can only be granted through an endorsement to the policy. Typing a name into the certificate does not create coverage.

Other wording contracts often require

Read the insurance section of the contract before you request the certificate. Common requirements include:

• Minimum limits, such as $1 million per occurrence and $2 million aggregate for general liability.
• Additional insured status for the client, sometimes for both ongoing and completed operations.
• Waiver of subrogation, which stops your insurer from seeking reimbursement from the client.
• Primary and non-contributory wording, meaning your policy pays before the client’s insurance.
• Specific coverages, such as workers’ compensation, commercial auto, umbrella or professional liability.
• Notice of cancellation provisions.

How to get a certificate quickly

If you already have coverage, contact your broker or insurer with the exact certificate holder name and address, a copy of the contract’s insurance requirements and the project or location. Many insurers and online providers can issue a standard certificate the same day, and some let you download one from an online account.

If the request requires endorsements you do not yet have, the insurer must add them to the policy first, which can take longer and may cost extra. If you have no coverage at all, you will need to apply and buy a policy before any certificate can be issued; for simple, low-risk businesses this can sometimes happen quickly, but it depends on the insurer’s underwriting.

Why certificates get rejected

Most delays come from a mismatch between the certificate and the contract. Check these before you send it:

• The named insured does not match the business name on the contract.
• Limits are lower than the contract requires, or a required coverage, such as umbrella or auto, is missing.
• The certificate holder’s legal name or address is wrong.
• The contract requires additional insured status or a waiver of subrogation, but the policy has no matching endorsement.
• A policy shown on the certificate has expired.

Collecting certificates from your subcontractors

If you hire subcontractors, require their certificates before they start and track expiration dates. If an uninsured subcontractor causes an injury or damage, the claim may land on your policy, and some states can treat an uninsured subcontractor’s workers as your employees for workers’ compensation purposes. Your insurer may also charge additional premium at audit for uninsured subcontractor costs.