What is a certificate of insurance? A guide for business owners and agents

Certificates of insurance are one of the most common documents in business — and one of the most misunderstood. Business owners need them to sign leases, start contracts, and work with vendors. Agents issue dozens of them every week. Here's what they actually mean and what they don't.

What is a certificate of insurance?

A certificate of insurance (COI) is a one-page summary document that confirms a business has active insurance coverage. It lists the types of coverage in force, the policy limits, the carrier, and the policy effective and expiration dates.

In the United States, most certificates of insurance use the ACORD 25 form — a standardized document maintained by ACORD, the same organization behind the ACORD 125, 130, and other commercial insurance application forms.

A certificate of insurance is not a policy. It does not change, expand, or guarantee the terms of the underlying policy. It is simply evidence that coverage exists as of the date it was issued.

When do businesses need a certificate of insurance?

Certificates are requested constantly in commercial relationships. Common situations include:

• Commercial leases — landlords typically require tenants to provide a COI showing general liability coverage and naming the landlord as an additional insured
• Contractor jobs — general contractors require subcontractors to show proof of GL and workers comp before starting work on a project
• Vendor and client contracts — many service agreements require the vendor to maintain minimum insurance limits and provide a COI on request
• Government contracts — public agencies almost always require contractors to provide COIs before work begins
• Events — venues and event organizers commonly require event liability coverage COIs from vendors and performers

What is an additional insured?

An additional insured is a person or organization (other than the named insured) who is added to a policy and protected by its coverage. When a landlord requires a tenant to name them as an additional insured on their GL policy, it means that if a customer is injured at the tenant's business and sues both the tenant and the landlord, the landlord is covered under the tenant's policy.

Additional insureds are listed in a separate section of the ACORD 25. Adding an additional insured typically requires a policy endorsement — the agent cannot simply list someone on the certificate without the underlying policy endorsement being in place.

This is one of the most common points of confusion: certificates cannot grant rights or coverage that don't exist in the policy itself.

What a certificate of insurance does not do

• It does not modify the policy or create new coverage
• It does not guarantee the policy will remain in force — policies can be cancelled after the COI is issued
• It is not the same as adding someone as an additional insured (a common misconception)
• It does not transfer liability or waive any policy exclusions

The ACORD 25 itself includes a disclaimer at the bottom stating exactly this: "This certificate is issued as a matter of information only and confers no rights upon the certificate holder."

Certificate holder vs. additional insured

The certificate holder is simply the party to whom the certificate is addressed — typically whoever requested it. Being listed as a certificate holder does not give them any coverage under the policy. The additional insured endorsement is a separate, more meaningful status that does provide coverage rights.

When a client's landlord asks to be named as an "additional insured and certificate holder," both parts are important: the additional insured endorsement needs to be added to the policy, and the ACORD 25 should list them as both the certificate holder and note the additional insured status in the description of operations section.

How agents issue certificates quickly

For independent agents, certificate requests are a constant operational burden — especially for contractor clients who may need new COIs for every job. Most agency management systems (AMS) allow agents to generate ACORD 25 certificates directly from the policy data. The key is having accurate, complete policy information in your system from the start.

AgencyAssist ensures that from the very first submission, you have all the data needed — policy limits, additional insureds, and coverage details — already organized and ready to use when that first certificate request comes in.

Get your clients properly covered from day one

AgencyAssist collects everything you need — including additional insured requirements — in one clean intake form.