What is a COI and Why Do You Need One for a Commercial Construction Company?

Nov 9, 2023 | Blog

Wondering what is a COI and why you might need one? When you’re looking for a commercial construction company, you want the very best option to bring your project to life. There are a lot of factors to consider such as experience, budget, and quality of work. But there is one important piece of documentation that can’t be forgotten: the certificate of insurance (COI).

What exactly is a COI and why is it so important? Let’s take a closer look

A certificate of insurance is a document that proves a contractor or construction company has liability insurance. Liability insurance is designed to protect both the construction company and the client by covering any damages or injuries that may occur during the project. A COI typically includes the company’s name and contact information, the policy number and limits of liability, and the dates the policy is in effect.

So why is a COI so important when it comes to selecting a commercial construction company? First and foremost, having a COI demonstrates that the construction company is a responsible and professional organization. It shows that they’re invested in protecting themselves and their clients in the event of an accident or mistake. If a construction company doesn’t have a COI, it’s a red flag that they might not take the necessary precautions or have the appropriate coverage in place.

Additionally, many clients won’t even consider working with a construction company that doesn’t have a COI. This is especially true for larger projects or public construction jobs, where insurance is often a requirement. Not having a COI can disqualify a construction company from even being considered for a project, regardless of their qualifications or experience.

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In some cases, a client may also request to be named as an additional insured on the construction company’s liability insurance policies. This means that the client will be covered under the construction company’s insurance policy in addition to the construction company itself. This is another layer of protection that clients may require in order to feel confident in their choice of construction company.

Of course, simply having a COI isn’t enough. It’s important to review the document carefully to ensure that it meets your needs and requirements. For example, you should verify that the policy has adequate limits of liability for your project and that the dates of coverage match up with the expected timeline of the project. You can also request to see a copy of the construction company’s workers’ compensation insurance policy, which addresses injuries that may occur to workers on the job.

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What Does a Certificate of Insurance Typically Include?

Before you hire a commercial construction company, it’s crucial to ask for their certificate of insurance. A certificate of insurance is a document that proves that a company has insurance coverage. It’s important to ensure that the construction company carries adequate insurance coverage to avoid any potential liabilities during construction. But what does a certificate of insurance include?

Name Of Insured Party

The certificate of insurance typically includes the name of the insured party; in this case, the commercial construction company. It will also list the name of the insurance carrier and the policy number. This information will provide you with the assurance that the construction company has purchased an insurance policy from a reputable company.

Coverage Of Policy

The certificate of insurance will also list the coverage that the policy provides. The coverage will vary, and it’s important to review the policy coverage to ensure it meets your needs. Some of the policies include general liability, workers’ compensation insurance, insurance costs, commercial auto insurance, and property insurance to name a few. General liability insurance protects you from any liability claims from third parties while workers’ comp insurance provides compensation to workers for any work-related injuries.

Policy Limits

The certificate of insurance will also have policy limits clearly listed. Policy limits refer to the maximum amount the insurance provider will pay out for a covered claim. If the construction company is underinsured, it could potentially put you at risk for any damages that exceed their insurance policy limit. This is why it’s important to review the policy limits carefully.

Additional Insured

Additional insured information is also included on a certificate of insurance. An additional insured is a party that is listed on the policy who is also protected by the small business insurance coverage. In construction, it’s common for property owners to be listed as additional insureds on the policy. This ensures protection if there are any accidents on the construction site.

Certificate Holder Section

Finally, the insurance certificate will also have a certificate holder section. A certificate holder is an individual or company that wants proof of insurance from the construction company. Certificate holders are usually, but not limited to, property owners, landlords, and lenders. Having a certificate holder is an added layer of security that ensures all parties are up to date on the construction company’s insurance coverage.

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Understanding Certificate of Insurance Coverage Types And Information

If you are searching for a reliable commercial construction company, one of the essential documents to ask for is the Certificate of Insurance (COI). This document is issued by the insurance company and provides information about the insurance coverage of the contractor, including policy limits and effective dates. Understanding the different types of COI coverage and the information they provide can make all the difference when it comes to protecting your business and minimizing risk. Now we will take a closer look at the various types of COI coverage and the information they provide.

General Liability Insurance

One of the most common types of COI coverage that contractors should have is general liability coverage, which offers coverage against damages or injuries that may arise as a result of their operations. A general liability insurance policy typically covers bodily injury, property damage, and personal or advertising injury. As a client, you should aim to obtain a COI that verifies that the contractor has an active general liability policy and provides its coverage limits. It is recommended to have the coverage limit at least $1 million.

Workers’ Compensation Insurance

If the construction company you are working with has employees and a business owner, they should also have workers’ compensation insurance. This insurance covers medical expenses and lost wages for an employee who gets injured while on the job. If a worker is injured on your job site and the company does not have this type of insurance, you may find yourself liable for the employee’s expenses and could face serious legal trouble. As a client, it is essential to request a COI that verifies that the contractor has active workers’ compensation coverage.

Automobile Liability Insurance

If the contractor will be using vehicles as part of the construction project, they should have automobile liability insurance. This policy provides coverage against damages caused by the company’s vehicles during the job. The COI should verify that the contractor has an automobile liability policy that covers the work being performed and the vehicle(s) that will be used.

Umbrella Liability Insurance

An umbrella liability insurance policy is supplemental insurance coverage that provides additional liability protection on top of the primary general liability policy. This type of policy can be beneficial in case of a large lawsuit or claim that exceeds the limits of the primary policy. The COI should verify that the contractor has an active umbrella liability policy and provide coverage limits.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, provides coverage against claims of negligence or errors in the contractor’s professional services. This policy can be particularly useful for construction companies that offer design and engineering services. Clients should request a COI that verifies that the contractor has an active professional liability policy and know the extent of its coverage.

When it comes to commercial construction projects, knowing the different types of insurance coverage and the information they provide can help you make informed decisions and protect your business from unnecessary risks and liabilities. Make sure to request a COI from the contractor that provides detailed information about their insurance coverage, including limits and effective dates, before agreeing to work with them. Stay informed, and always keep your business’s best interests in mind.

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South Coast Improvement Company

In essence, South Coast Improvement Company is the preferred choice for your commercial construction projects due to our commitment to high-quality work coupled with our comprehensive COI. We recognize the importance of successful communication and cooperative relationships among all stakeholders. We have a track record of successful projects, completed on time within budget. From securing permits and licenses to finding the best materials and equipment for any situation. As you embark on your construction journey, keep in mind that South Coast Improvement is here to ensure your project meets the highest standards of success with minimum hassle and cost. Don’t hesitate to call us today for more information on how we can help get your construction project started!


In summary, a certificate of insurance is a critical piece of documentation that should never be overlooked when selecting a commercial construction company. It speaks to the company’s professionalism, responsibility, and dedication to protecting both themselves and their clients. If you’re considering a construction company for your project, take the time to review their COI carefully and ensure that it meets your needs. By doing so, you’ll feel confident in your choice and have peace of mind throughout the project.

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