As a contractor, having proper insurance coverage isn’t just about protection—it’s often a requirement for doing business. Whether you’re bidding on new projects or maintaining existing relationships with clients, you’ll need to prove you have the right coverage in place. That’s where a certificate of insurance (COI) comes in, and at ContractorNerd, we help contractors like you find the right coverage and manage certificates efficiently.

What Is a Certificate of Insurance for Contractors?

A Certificate of Insurance (COI) is a document that provides proof of insurance. Think of it as your business’s insurance ID card. Your COI includes key details:

  • The contractor’s name and address
  • The insurance agent’s contact information 
  • The name of the insurer(s) providing coverage 
  • The type of coverage 
  • The amount of coverage 
  • A policy number
  • The policy’s expiration date 
  • A description of coverage 
  • The name and contact info of the COI requestor (and whether that requestor is an additional insured)

Getting your certificate is simple. ContractorNerd sends it to you right after you buy insurance. Many clients will ask to see your certificate before hiring you. Having quick access to this document helps you win jobs faster.

What’s the difference between a COI and an insurance policy?

Understanding the Difference Between a COI and an Insurance Policy While a COI serves as proof of insurance, it’s important to understand that it’s not the same as your actual insurance policy. Think of your COI as a snapshot or summary of your coverage, while your insurance policy is the complete picture. Here’s how they differ:

Your Certificate of Insurance:

  • Provides a summary of key insurance information
  • Serves as proof of coverage for clients and project owners
  • Shows whether specific parties are listed as additional insureds
  • Functions as an easy-to-share document for bidding and contracting

Your Insurance Policy:

  • Is a detailed contract between your business and the insurance company
  • Contains comprehensive information about coverage, exclusions, and conditions
  • Outlines specific procedures for handling claims
  • Includes all endorsements and policy modifications
  • Serves as the definitive document for coverage questions and claims

While your COI is essential for daily business operations and winning contracts, your insurance policy is the document you’ll turn to when you need detailed information about your coverage or when dealing with potential claims. Since insurance claims can be made retroactively, it’s wise to maintain records of both your policies and COIs throughout your business’s lifetime.

The Critical Role of COIs in Construction

For contractors, a certificate of insurance does far more than just prove and reinforce coverage — it opens doors to new business opportunities and helps maintain professional relationships. This is the case because project owner’s liability policies will typically require that all subcontractors secure and maintain liability policies that meet or exceed certain liability limits (typically matching their own base policy). Given this, project owners and general contractors often will not work with subcontractors who can’t provide proper COIs that satisfy the terms of their own liability policy.

Building Trust and Credibility With Proof of Liability Insurance Coverage

Think of a COI as your professional credential in the construction industry. Just as a driver’s license proves you’re authorized to operate a vehicle, your certificate of insurance demonstrates that you’re properly insured to work on construction projects. It assures clients that you have the necessary coverage to protect against any liability claims that might arise during their project.

When you provide a current COI to clients, you’re doing more than meeting a requirement—you’re demonstrating your professionalism and commitment to responsible business practices. Sending a COI quickly helps:

  • Show financial responsibility and stability
  • Build confidence with project owners
  • Establish your professional credibility
  • Create positive, long-lasting business relationships

Protection Against Construction Risks

Construction projects inherently involve numerous risks, from workplace accidents to property damage. While the COI itself doesn’t provide direct financial protection, it verifies that you have the insurance coverage needed to handle various situations that might arise. This protection extends to:

  • Workplace accidents and injuries
  • Damage to client property
  • Third-party liability claims
  • Legal expenses and defense costs

Ensuring Regulatory Compliance

The construction industry is highly regulated, and maintaining proper insurance documentation is crucial. Your COI helps ensure:

  • Compliance with local building codes and regulations
  • Adherence to state contractor requirements
  • Fulfillment of project-specific insurance mandates
  • Proper documentation for legal requirements

Understanding Essential Liability Insurance Endorsements

Specific endorsements come into play when your project owner / manager asks for a COI. Endorsements modify your policy coverage and some may be required by project owners or general contractors. These additions to your policy can significantly affect your coverage and your ability to win contracts. Let’s examine the four most critical endorsements you’ll encounter.

Additional Insured Endorsements

When a client requests to be added as an additional insured, they’re asking for your policy to protect them if they’re named in a lawsuit related to your work. This common requirement effectively extends your liability coverage to other parties involved in your projects.

For example, if you’re working as a subcontractor, the general contractor will typically require additional insured status. This means if someone is injured due to your work and sues both you and the general contractor, your insurance would defend and indemnify both parties.

Blanket Additional Insured Endorsements

A blanket additional insured endorsement offers a more efficient approach to handling multiple additional insured requests. Rather than processing individual endorsements each time, this automatic coverage extends to any party you’re required by written contract to add as an additional insured.

This type of endorsement can save you significant time and money, especially if you frequently work with different clients or on various projects. When you get quotes through ContractorNerd, we typically suggest getting a blanket additional insured endorsement — it makes doing business easier.

Primary and Noncontributory Endorsements

The primary and noncontributory endorsement specifies that your insurance provides primary coverage and won’t seek contribution from the additional insured’s insurance policy. This means your policy responds first to claims, and the additional insured’s policy won’t be involved unless your limits are exhausted.

Consider this scenario: A visitor is injured at your worksite and sues both you and the property owner. With a primary and noncontributory endorsement, your insurance responds first (primary), and the property owner’s insurance isn’t involved (noncontributory) unless your coverage is exhausted.

Waivers of Subrogation Endorsements

A waiver of subrogation prevents your insurance company from seeking reimbursement from other parties after paying a claim, even if they were partially responsible for the damage or injury. This endorsement can be crucial in maintaining good relationships with clients and winning contracts.

Here’s how it works: If your insurance company pays a claim and identifies another party who was partially responsible, they typically have the right to seek recovery from that party. A waiver of subrogation removes this right, providing additional protection to your clients. This often costs extra, and is dictated by the project owner / general contractor.

Who Needs a COI in Construction?

In the construction industry, several parties typically need to maintain and provide COIs:

  • General Contractors: Need to provide COIs to property owners and maintain copies from all subcontractors
  • Subcontractors: Must provide COIs to general contractors and property owners
  • Specialty Contractors: Frequently provide COIs to residential and commercial customers, including:
    • Electrical contractors
    • Plumbing contractors
    • HVAC contractors
    • Roofing contractors
    • Concrete contractors
  • Project Stakeholders: Frequently request and manage COIs for everyone else involved in the project, think:
    • Project owners and developers
    • Construction managers
    • Design professionals
    • Equipment rental companies
    • Material suppliers working on-site

Common situations requiring a COI include:

  • Before starting any new construction project
  • When renewing annual contracts
  • During the bidding process for new work
  • When entering master service agreements
  • Before accessing certain job sites or facilities

Essentially, if your business interacts with other entities and there is a potential for liability or risk, you may be asked to provide a COI. Take a look at our insurance guides for specific trades:

Modern COI Management and Tracking

The digital age has transformed how certificates of insurance are managed and tracked. Gone are the days of purely paper-based systems and manual tracking. Today’s contractors need efficient, digital solutions to manage their insurance documentation.

Contemporary COI management systems offer:

  • Immediate access to your ACORD 25 certificates through online portals
  • Automated expiration notifications to prevent coverage gaps
  • Digital storage and retrieval of all insurance documents
  • Streamlined processes for adding additional insureds
  • Real-time coverage verification for clients

COI Cost Considerations and Value

Most contractors can secure a liability policy with a blanket additional insured endorsement which makes certificates (and adding others onto your policy as an additional insured) essentially free. If your carrier is charging you for an additional insured, you might consider looking for a carrier who is more tailored for contractors and your specific line of work. When you get quotes through ContractorNerd, we’ll help you understand:

  • Policy premium for standard coverage limits that satisfy most projects (and project manager insurance requirements)
  • Whether your policy has a blanket additional insured endorsement and costs of other common endorsements
  • Ways to optimize your coverage and workflows for quick-to-work insurance policies that work for your client and/or project manager

Getting Started with ContractorNerd

When you’re ready to secure proper insurance coverage and manage your certificates effectively, ContractorNerd is here to help. We understand the unique insurance needs of contractors and can help you:

  • Compare quotes from top-rated insurance carriers
  • Secure all required endorsements
  • Access digital COI management tools
  • Ensure compliance with contract requirements
  • Maintain proper documentation

Don’t let insurance requirements stand in the way of your next project. Get quotes today and discover how easy it can be to manage your certificates of insurance with ContractorNerd. Our team of construction insurance experts is ready to help you find the right coverage at the right price.