What’s a COI? What a Certificate of Insurance for Contractor Vendors Is and Why It Matters

Simply put, a Certificate of Insurance (or COI) is an official document that an insurance company or broker provides to prove active business insurance coverage for a particular commercial use. It is a specific type of documentation that supports relevant proof of insurance. Perhaps the best questions to address are:  

• “What can a COI tell you about a contractor or vendor?” 
• “Does it really matter if a vendor has a COI or not?”  
• “Isn’t a COI just another way of saying proof of insurance?”  

There is more than one good reason to verify a vendor has an up-to-date and legitimate COI before partnering with them. An up-to-date COI can tell you about the legitimacy and integrity of a vendor than you may realize. 

Contractor or full-time employee, you deserve to know details about who you work with that could affect your facility and bottom line. An up-to-date COI adds an extra layer of protection for your business, fostering a professional and safer environment.

What a Certificate of Insurance for contractors can say about a vendor

In many circumstances, a Certificate of Insurance is legally required for contractor jobs and projects. For example, public buildings or government property projects often require proof of insurance and COI. Additionally, obtaining an official COI means that insurance coverage verifiably matches the risk of a project. Insured vendors who make sure they have a COI for certain projects also demonstrate that they are attentive to maintaining proper documentation, likely monitoring contractor behavior, and hiring contractors they feel can be trusted.  

Having an up-to-date Certificate of Insurance is also a positive sign that a vendor is mindful. It indicates that the vendor is conducting business professionally and thoughtfully, and shows they are contract-ready. Vendors who stay on top of insurance and certifications also generally understand that their clients don’t just want to see proof of insurance; they want to see the details and are fully committed to safety on-site. An up-to-date Certificate of Insurance can say a lot about a vendor in just one document—but why should your business care, and what’s the difference between proof of insurance and a Certificate of Insurance?

The difference between COI and proof of insurance is in the details

To answer our last question, no, proof of insurance and Certificate of Insurance are not the same. 

Proof of insurance is in the name—whether it only protects them or protects you too, it’s generalized proof that a business has some sort of insurance. A COI is a specific document that companies, such as vendors and contractors working onsite, obtain that shows how the coverage applies to your (their client’s) business and the project at hand. Verifying that a vendor you are considering working with has a Certificate of Insurance adds another layer of protection to help your business bring safe and qualified contractors on-site. It’s also another form of documentation to support that their team members and work are insurable.  

The bottom line is that a Certificate of Insurance isn’t only about a vendor protecting themselves from liability; it gives your business another way to confirm a vendor’s identity and review the details of the coverage to make sure the policy meets your specific needs. It also adds another layer of protection from financial liability for your business. 

One more way to make sure vendors are screened to your standards, free of charge

We believe that all sites and facilities deserve to work with vendors that hire contractors who are professional, safe for the job, insured, and who are who they say they are. With multiple levels for drug screening, background checks, and verifications, Certified Contractors offers free enrollment for businesses looking for vendors screened to their standards.  A Certificate of Insurance isn’t a fool-proof guarantee, but it’s an important step to help you hire contract-ready professionals, add another layer of safety on the job, and help reduce financial liability for your business to give you peace of mind. That’s why Certified Contractors requires all vendors to upload a Certificate of Insurance when they join the program. It’s just one more way for us to help your businesses find vendors and contractors screened to your standards. 

Want to learn more? Contact our team today to learn more, or enroll your business to find a vendor screened to your standards today—for free!