If you’re wondering how to get a COI from a vendor, you’ve come to the right place.
A certificate of insurance services is an extremely important document in the insurance space. Practitioners and businesspeople everywhere use them to provide proof that they have insurance coverage—or to suss out if someone that they want to work with does.
There can be costly consequences for those who enter business relationships without first verifying their new partner, vendor, or contractor’s coverage. Ultimately, your business can be held financially responsible for something that goes wrong on a job if you didn’t do your due diligence of insurance and compliance verification on the front end. That’s where COIs come in.
In order to obtain a COI from a vendor, you’ll officially put in a certificate of insurance request from them. It isn’t a complicated process, but it is an important one. In this blog, we’re laying out the details you need in order to submit an insurance request form to receive an insurance certificate effectively.
What Is the Purpose of a COI in Insurance?
Certificates of insurance (meaning an insurance certificate and often referred to in shorthand as a COI) is a document that serves to verify the existence of a current insurance policy by summarizing its key details. They comprise important policy information, including the policyholder’s name and contact information; who is insuring them; the type of policy they’re being insured for; its policy limits, additional insureds effective dates, and expiration date; and the receiver of this proof of coverage (aka the certificate holder).
COIs are not insurance policies themselves—they just provide evidence of them. It’s your job as an individual or business hiring a third-party service provider, contractor, or other vendor, to ensure that they have the correct coverage in place to effectively do a job (and not involve you in their potential financial risk).
What Does COI Request Mean?
The term “COI request” refers to the action that companies or individuals take when they wish to verify another party’s insurance coverage. They can do this either through an in-person request, via a mailed letter, or digitally through email or another communication platform. While the request itself is not an official insurance document, it is important to maintain professionalism within it.
Why Do Companies Request COIs?
A COI certification provides evidence of a specific insurance policy for a specific policyholder. There are a few significant reasons why companies request COIs:
- They want evidence of a standing insurance policy. This is the standard reason why someone would request a COI in order to confirm that someone has the coverage that they claim.
- They want evidence of a standing insurance policy—and they don’t want to sift through dense documents to get it. If you’ve never seen an insurance policy “in the flesh,” it’s a hefty document, to say the least. That’s one of the reasons that ACORD, an influential nonprofit organization in the insurance space, aimed to simplify and standardize the insurance verification process with straightforward, typically one-page documents called COIs that provide all of the details a verifier would need.
- They want to remain compliant with industry standards or state requirements. Insurance requirements vary from industry to industry as well as across different states. It’s important to have an idea of what is mandated in your state and for your line of work, and within your COI request form, you can lay out expectations that ensure that your vendor’s insurance coverage adequately meets those standards.
- They do not want themselves or their vendor to be held financially responsible in the case of accidents or damages. Every third party that you employ adds a new layer of risk to your business. Companies importantly aim to mitigate risk as much as possible, and confirming the adequate coverage of your vendors is one no-brainer way to do so.
How To Request a COI From a Vendor:
Now that you have a better understanding of what a COI is and why companies request them, let’s walk through how to best go about requesting one from a vendor you want to work with.
Here’s what you need to know in order to ask for a COI from a vendor:
- The best time to ask for a COI is as early as possible—meaning definitely before you begin working with someone. This is especially important in fields with high inherent risk, such as contracting and construction, because as soon as someone steps onto a job, there could be claims headed your way.
- You should have an idea of what you need from them. For example, are you verifying their general liability coverage, workers’ compensation coverage, or both? Do you need any specific additions or provisions, such as being added as an additional insured to their policy? Do you have minimum coverage limits in mind as it pertains to your business? Consider these things and lay out a list of your requirements to make it as easy as possible for the vendor (and their insurance provider) to fill out right the first time.
- You can send the actual COI request form or PDF by whichever means you prefer. Generally, most businesses go about this through either mailing a physical letter or sending a digital request over email. Both of these options are excellent as they inherently create a paper trail (helpful in the case that an eventual claim stems and you can show that you rightly requested insurance certification).
How Do You Ask for a COI With a Letter?
When requesting a COI from a vendor with a letter, you should lay out why you’re requesting the COI in the first place and outline the coverage details that you specifically need. You should also provide your contact information, as you will become the certificate holder. Keep a copy of the mailed letter for your records and confirm the vendor’s mailing address before you send it.
How Do You Ask for a COI Online or via Email?
If you opt for the digital method of COI request, the process will go very similarly. Within the email, lay out why you’re requesting a COI, which kind of insurance you want to verify, and any requirements you have for their coverage. Again, provide your contact information since you’ll become the certificate holder, and send it off!
How Much Does a COI Cost in the US?
You may ask yourself, how much does a COI cost in USA? With all this talk of risk and regulation, we’ll end on a positive note here. COIs are 100% free in the U.S. While insurance policies themselves are, of course, paid agreements (in the form of a policyholder paying monthly dues in the form of premiums), COIs are more like receipts of purchase or proof that the policy exists. Insurers will generate them free of charge.
myCOI is the Certificate of Insurance Verification Tool You’ve Been Missing
Tired of manual COI verification and becoming the self-taught in-house insurance expert on your team? Partnering with myCOI’s team of industry professionals will help you save time, reduce headaches, and remain compliant—across all of the vendors you work with. Call us today if you’re ready to hear more.