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Workers Compensation Certificates of Insurance

Learn what they are, what they do, what's on them, who needs them and where to find one..

What is a Certificate of Insurance:

A Certificate of Insurance (COI) is an informational document that provides details about insurance coverage to someone who has asked for that information to be provided.

Certificates are provided either by the insurance company who issued the policy or by an insurance agency who represents the insurance company and issues the document on behalf of the insurance company.

Most insurance certificates are issued to provide insurance policy information to interested third parties. They are usually produced as a requirement of a contract between the named insured on the policy and the third party involved. A Certificate of Insurance typically provides to the certificate holder proof that an insurance policy exists and shows the limit or amount of insurance provided on the policy. Many times a certificate of insurance will also convey information to the certificate holder as required under their contract with the named insured such as being shown as an additional insured or having coverage limited to a specific job or location. Be sure to scroll down and read more below!

A Certificate of Insurance is also commonly known as:
  • An Insurance Certificate;
  • A COI;
  • Certificate;
  • Proof of Insurance;
Don't be confused, even though it may be called different things, a Certificate of Insurance is just a piece of paper that shows proof of coverage at the time it was issued. Make sure to scroll down and read below!

You'll find as you read through this page about Certificates of Insurance that we've provided you with a basic knowledge on the working functions of a Certificate of Insurance. You'll learn what a certificate is, what a certificate of insurance can and cannot do, what information is provided on a certificate, who needs a certificate of insurance and how to secure one. On other pages you'll find we provided you with some real world information as to the effect certificates have on any workers compensation policy. So if you are a contractor or if your business uses subcontractors pay close attention to this section of our website. And always remember to have your workers compensation policies and audits reviewed by a professional workers compensation consulting firm. It is your only protection assurance that you are paying the proper premium and not overpaying for your workers comp insurance.

Limitations of Workers Compensation Certificates of Insurance

What a Certificate of Insurance Cannot Do:

As a document that only provides information about workers compensation insurance policy coverage an insurance certificate is very limited in its ability. In today's world of commerce the insurance certificate is used every day to provide valuable policy information to interested third parties. Generally a certificate is used when someone has requested to be supplied with proof that the named insured on the policy carries insurance usually as required by some type of contract.

The certificate of insurance is very limited in the type of information it can provide. Remember this document is only designed to provide basic policy information. Today however, we find many instances of abuse in the request for certificates. So, on this page we've decided to show you just what a certificate of insurance cannot provide for those who may request them as proof of coverage.

A Certificate of Insurance cannot:
  • provide those seeking the certificate with rights under an insurance contract;
    • Changes granting rights to any insurance policy can only be made by an endorsement to that policy. Remember, a certificate of insurance is only an informational document and does not guarantee a change or an endorsement to the policy.
  • extend policy conditions to the certificate holder;
    • Policy conditions cannot be modified by a certificate extending them to a certificate holder.
  • modify the terms as outlined within the insurance policy;
    • The insurance policy is a contract and limited changes to contract terms can only be accomplished by following proper procedure as outlined by the insuring company.
  • guarantee a policy will not be cancelled in accordance with the conditions of the insurance policy or modify;
    • Cancellation of a workers compensation policy are controlled by state statute and are not able to be modified by a certificate.
  • bestow or extend rights to the certificate holder;
    • Extending policy rights, such as additional insured status for a general liability policy, can only be accomplished by properly endorsing the insurance policy in question. Insurance certificates convey no rights they are only an indication of coverage provided under the policy.
  • provide insurance coverage to the certificate holder;
    • The insurance certificate only indicates coverage found in place on the policies in force at the time the certificate is issued. A certificate of insurance coveys no insurance coverage to the certificate holder, only proper endorsements to the insurance policy can achieve that accomplishment.

The insurance certificate, while so important to commerce, is not the document that provides insurance coverage, only the insurance policy provides coverage. The certificate of insurance cannot provide protection as so many certificate holders believe, remember, they only show the coverage included on the policy.

If you are a certificate holder and require modification to the named insured's insurance policy you should request a policy endorsement that reflects your requirements. We find many businesses require to be shown as some form of additional insured on the named insured's policy. Most commonly this request applies to the general liability and business auto policies rather than the workers compensation policy. So if you need this type of policy modification, make sure the policy endorsement is processed.

Information Commonly Provided On An Insurance Certificate

Information you can find on an Insurance Certificate:

Certificates of Insurance rule the world of commerce, especially that part of the world where contractors play. As an insurance document the certificate provides information about insurance policies and coverage restrictions to interested third parties. Most of those third parties are involved because of some type of contract. Most often, certificates are asked for when there is some type of contract involving two or more parties.

Here's a list of the type of information you can find on a Certificate of Insurance:
  • Name and address of the named insured on the policy
  • An issue date of the certificate
  • The name of the insurance carrier providing coverage as listed on the certificate
  • A list of policy numbers for the various policies shown on the certificate
  • Limits of liability for each policy shown on the certificate, this may include general liability, commercial auto, excess liability and workers compensation
  • Effective dates and expiration dates for the various policies shown on the certificate
  • Owner information, information as to whether the Owner, Partners, LLC Members or Corporate Officers are included or excluded from workers compensation coverage
  • Limits for employers liability limits; each accident, disease each employee, disease policy limit
  • A section for a description of operations, special items, restrictions to coverage as provided on the included policies
  • the Certificate Holder information, name and address
  • Policy cancellation wording, conditions of notification
  • The insurance producers signature
You'll find there are two types of forms used when providing proof of insurance coverage, the standard certificate form and the non-standard certificate form.

Standard Certificate of Insurance Forms:

Standard certificates are produced on an Acord form number 25-S, a form provided to the insurance industry by ACORD, the Association for Cooperative Operations Research and Development. ACORD is a non-profit group established by its members, insurance companies, with the mission of establishing and maintaining standard forms to be used by the insurance industry. All ACORD forms are protected by copyright. When a request for an insurance certificate is made, it is this form to which most are referring. Standard certificate forms have been approved by insurance carriers for use by their agents and authority to complete and distribute the standard certificate form is addressed under the contracting agreements between insurance agents and the insurance carriers they represent. As long as the ACORD rules on the completion of the certificate are followed then the insurance company will back the certificate.

Non-Standard Certificate of Insurance Forms:

Danger! The use of non-standard certificates posses a danger for all involved, except maybe the party asking for the certificate! Because it's usually that party who has developed the non-standard certificate and requires it to be used.

First off, if you are an insurance agent and have issued a non-standard certificate you may have an unknown E & O exposure. You see, standard certificates issued on ACORD forms are automatically approved by most insurance carriers when it is issued in accordance with the certificate guideline rules established by ACORD. Non-standard forms on the other hand are not automatically approved for use and may be a violation of the carriers contract with the producing agent. The only way a non-standard form should be used is with approval of the insuring carrier. If the insurance carrier has seen a copy of the completed certificate and signed off, then all should be ok. But I'd still be wary!

So a word of caution! If you are an agent sending a certificate, make sure it is an approved certificate within accordance of your contract of authority. If you are the entity asked to provide proof of insurance on a non-standard form, have that form reviewed by your agent and attorney. Most of the time when another entity wants to use their own form, a non-standard form, there is some type of contractual, possibly uninsurable, issue that needs to be addressed.

Who Needs A Certificate of Insurance

Who, When and Why You Need to Have a Certificate of Insurance:

In this section we are going to explain just why you may need to ask someone for an insurance certificate for workers compensation.

The Insurance Certificate is an informational piece of paper that consumes a great deal of time in the insurance world. It seems as though everyone is asking someone for proof of insurance. But what's really behind this, just why do some need to have a certificate, who are these people and do you need to ask for an insurance certificate from someone you conduct business with?

The Insurance Certificate is written proof that workers compensation coverage is being provided for a certain group of workers. You must understand that the certificate is used by a broad spectrum of people for a variety of reasons. From a workers compensation stand point, it is used to provide proof that a workers compensation policy is in place.

Typically, if you enter into any type of contract where the contracting company is attempting to shift liability to your business for work you are going to perform then you will be asked to supply proof of insurance coverage. In the below list we've outlined a few of the reasons why and who may need to secure a certificate. Keep in mind this is not an all inclusive list but just a starting point.

A list of those who may require a Certificate of Insurance for workers compensation:

  • Those who enter into a contract - If a contract requires that certain limits of coverage be provided then a certificate will be required by the contracting company to provide proof that coverage exists.

  • Those who hire another firm to do work - A workers comp basic...when you hire anyone else to perform work on your behalf, expect that you are responsible for the workers compensation coverage for those other workers. So anyone who hires another firm will want to make sure there is a workers compensation policy in place for those workers. This is accomplished by asking for an Insurance Certificate.

  • Contractors using subcontractors - When any contractor hires another contracting firm to complete work for them then a certificate will be required to provide assurance that workers compensation coverage is in place on the subcontractor.

  • General Contractors, Developers, Project Owners - Typically these types of entities will require anyone performing work on a job on which they are either developing, acting as the general contractor or own to provide them with insurance certificates that show workers compensation coverage in place.

  • Governmental Entities - Cities, Counties, State Departments and other governmental entities who have work performed for them will probably have some sort of contract in place in which they will list out the insurance requirements. One of the requirements will no doubt be that those performing work for them will have to provide workers comp coverage and provide a certificate of insurance as proof of coverage.

  • You Do - If you plan to hire a contractor or any other business to provide a service for your business. Remember that in most states your company will be next in line to handle a workers compensation claim and provide workers comp coverage for the workers of the company you hire if they do not have, or may have had workers comp insurance but has since lapsed.
Will asking and securing a properly executed insurance certificate guarantee that you have protected your company from the unknown workers compensation claim? No. But it certainly is a step in the right direction.

So as you can see, many different entities may have the need to ask for and receive an insurance certificate for a variety of reasons. At some point in time you may find that you and your company may actually have a need to ask for a certificate.

Where To Find A Certificate Of Insurance

Where you can find a Certificate of Insurance if you need one:

In most cases insurance certificates are produced by the insurance agent that provides the workers compensation coverage. In reality the certificate is probably prepared by a service person at the insurance agency where your insurance agent works. So if you need to have a certificate of insurance sent to someone for you then the first place to start is to contact your insurance agents office.

Unless the only line of insurance coverage you carry is workers compensation the insurance certificate that you ask for will also include other coverage that you have in force. This may include general liability, commercial auto along with umbrella and other insurance policies that you may have purchased.

Sometimes, under certain circumstances, certificates cannot be prepared at the insurance agents office and must come directly from the insurance company. Sometimes additional endorsements to the workers compensation policy are required by the requesting entity. Both circumstances may cause unplanned delays in securing the certificate. So it's always better to make your requests for certificates as soon as you can to ensure their timely delivery.

Restrictions on work without an Insurance Certificate:

Most work projects will require that you provide certificates as proof of workers compensation coverage. Some will ask for an "original Insurance Certificate" while others will accept faxed or emailed images. Another item to be aware of is that many times whoever you are working for will not allow you or your work crew to come onto their work site until they have the properly completed certificate in their possession. Again it's a matter of timing. If the certificate is insurance agency produced you may find that some agents work very efficiently at processing requests for certs while others may not do such a good job. If there is a mistake and the correct information, as required by the contract you are working under, is not supplied on the certificate in a timely manner, you may even find yourself in breach of contract for the project.

Sometimes certificates for workers compensation coverage do not come from your insurance agent. If you secured your workers comp insurance from a State Fund or some other type of work comp provider then you may have to contact them directly in order to secure a valid insurance certificate. Many of these organizations may have on-line access to making requests for certificates.

Whatever the method used, we always suggest that you have a copy of the certificate sent to you at the same time it's being sent to whoever made the original request. We belief you should always maintain a certificate sent file in your office and not rely on the insurance agent or company.

It's a fact, there are only three times a certificate of insurance comes into play:
  • When the job begins and everyone is trying to get their ducks in a row.
  • When there's a claim problem and a reference to workers comp coverage must be made.
  • At audit time when premium dollars are on the line.

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