If you’re a business owner, contractor, or vendor, chances are you’ve been asked to provide a Certificate of Insurance (COI) before starting a job. At first glance, it might seem like a small piece of paperwork — but in reality, a COI is one of the most important tools in protecting both you and your clients.
Failing to provide one could mean losing a contract, damaging your reputation, or worse — exposing your business to significant financial risk. Let’s break down why clients ask for COIs, what they mean, and the potential consequences of not having one.
What Is a Certificate of Insurance?
A Certificate of Insurance is a one-page document that summarizes your business’s insurance coverage. It shows proof that you carry the types and limits of insurance required for a project, job, or contract.
Typically, a COI includes:
- Your company’s name and contact information
- The insurance carrier providing coverage
- Types of insurance in place (general liability, auto, workers’ comp, etc.)
- Policy limits and effective dates
- Additional insured endorsements (if requested)
Think of it as a snapshot of your insurance program — easy for clients to review without digging into lengthy policy documents.
Why Do Clients Request a COI?
Clients don’t ask for a COI just to create more paperwork. They request it because it protects their own interests and helps ensure they’re not left financially vulnerable. Here’s why it matters to them:
1. Risk Transfer
If something goes wrong on a project — property damage, an injury, or a lawsuit — the COI shows that your insurance policy, not the client’s, is the first line of defense.
2. Proof of Compliance
Many contracts require vendors, contractors, or service providers to carry specific types of coverage. A COI provides proof that you’re meeting those requirements before the job starts.
3. Peace of Mind
Clients want reassurance that they won’t be held liable for accidents beyond their control. A COI builds trust and gives them confidence in working with your business.
What Happens if You Don’t Provide a COI?
Failing to provide a COI can have serious consequences, both financially and professionally. Here are some potential risks:
🚫 Lost Business Opportunities
Many clients simply won’t move forward without proof of insurance. Not having a COI can cause you to lose contracts — sometimes to competitors who can provide one immediately.
⚠️ Legal or Contract Breaches
If your contract requires proof of insurance, not providing a COI could put you in breach of contract, opening the door to penalties or termination.
💸 Financial Liability
Without a COI (and the coverage it represents), you could be personally responsible for damages or lawsuits that arise during a project. One claim could be financially devastating for a small business.
❌ Damaged Reputation
Word spreads quickly in business networks. If you can’t provide a COI, clients may assume you’re underinsured or unreliable — making it harder to secure future opportunities.
How to Make Sure You’re Always Ready
The good news is, providing a COI doesn’t have to be complicated. Here are steps you can take:
- Keep your policies up to date. Regularly review your coverage with your insurance agent.
- Know your clients’ requirements. Some may request higher limits or specific endorsements.
- Request COIs in advance. Don’t wait until the last minute — build it into your process for new jobs.
- Work with an agent who understands your industry. They’ll know the common requirements and can issue COIs quickly when you need them.
Final Thoughts
Certificates of Insurance are more than a formality — they’re a critical part of doing business in today’s world. They give clients confidence, protect your company from unnecessary liability, and keep contracts moving forward.
Without one, you could face lost opportunities, financial exposure, or reputational damage. With one, you position your business as professional, credible, and trustworthy.
📑 Need a COI for an upcoming project?
At Muir Insurance Group, we make it fast and simple to issue certificates and ensure your coverage meets client requirements. Reach out to our team today — we’ll help you stay protected and business-ready.