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Certificates of insurance: what they prove and what they do not
How to read an ACORD 25 certificate of insurance, what it cannot prove about additional insured status or cancellation, and how state laws limit certificates.
A certificate of insurance (COI) is a one-page summary, usually on an ACORD 25 form, showing who insures a business, which policies exist, their dates and their limits. It proves that those policies were in place when the certificate was issued. It does not prove that coverage is still in force, that the holder is an additional insured, that the policy covers a particular job, or that the policy satisfies the contract. The form says so itself: it is issued as a matter of information only and "confers no rights upon the certificate holder."
What the ACORD 25 says about itself
The ACORD 25 (2016/03 edition, which New York's Department of Financial Services posts) opens with three disclaimers. The certificate does not amend, extend or alter the coverage the policies provide, and it is not a contract between the insurer or producer and the holder. A note then warns that a holder who wants additional insured status needs policy provisions or an endorsement, and that a waiver of subrogation may also require an endorsement, because a statement on the certificate does not confer rights in place of one. Further down, the form says the insurance is subject to all terms, exclusions and conditions of the policies, whatever the contract says, and that limits shown may have been reduced by paid claims.
Anyone who relies on a certificate while ignoring those lines is relying on something the form disclaims.
Reading a certificate, box by box
| Section | What it tells you | What to check |
|---|---|---|
| Producer, insured, insurers A to F | Who the agent is, who is insured, which companies issued each policy and their NAIC numbers | The insured's legal name matches the contract. Look up each insurer's NAIC number on the state department of insurance site and check its rating; see AM Best ratings explained for business buyers |
| Type of insurance and occurrence or claims-made box | Which coverage line, and the trigger | Contracts for completed work often require occurrence coverage |
| Policy effective and expiration dates | The period covered | Does the policy run through the end of the project, or will you need a renewal certificate? |
| ADDL INSD and SUBR WVD columns | A mark, usually Y, that someone believes an endorsement is attached | These are assertions. Ask for the endorsement pages |
| Limits | Each occurrence, aggregate and other limits | Aggregates may already be eroded by claims, and the form says so. Umbrella must sit above the right underlying policies |
| Description of operations | Free text, often where additional insured wording appears; an ACORD 101 schedule may be attached if space runs short | The wording should reference the endorsements that actually exist, not just repeat the contract |
| Certificate holder | The party the certificate is sent to | Being listed here does not make anyone an additional insured |
| Cancellation | Notice will be delivered in accordance with the policy provisions | Not a promise of notice to you. See below |
What a certificate does not prove
- The policy is in force today. The certificate is a snapshot on its issue date. If the insured cancels the next week, nothing obliges the producer to tell you.
- Additional insured status. The AI box is only a signal. Status depends on an endorsement that names you or a class that includes you, and on the specific form's scope. See additional insured endorsements explained.
- Waiver of subrogation or primary wording. These also require policy language. See waiver of subrogation: what it is and when contracts require it and primary and noncontributory wording in contracts.
- Coverage for the job. Classification limitations, exclusions, the policy's territory and wording that limits coverage to certain operations or locations can all remove the very exposure the contract worried about.
- Advance notice of cancellation. The ACORD 25 cancellation box refers back to the policy's own provisions, and the standard conditions send notice to the first named insured only. Holders receive notice only if the policy or an endorsement says they do. See policy cancellation and nonrenewal: notice periods and your rights.
- That the policy meets the contract. Only a comparison of the contract's requirements with the policy forms can answer that. The contract insurance requirements checker is a starting point.
- That the insurer is sound or admitted. The certificate lists the company; it does not rate it.
State laws that limit what a certificate can say
Many states regulate certificates directly, most of them following a model from the National Council of Insurance Legislators (NCOIL), the state lawmakers' organization. The NCOIL Certificates of Insurance Model Act, adopted in 2012 and readopted in 2017 and 2022, says a certificate is not a policy, does not amend or extend coverage and gives no rights beyond what the policy provides. It bars issuing or requesting a certificate with false or misleading policy information, bars a certificate from warranting that the policy complies with a contract, and makes cancellation notice depend on the policy's terms. A certificate issued or required in violation is void.
States have enacted their own versions at different times and with different details. Massachusetts and New York both enacted certificate laws in January 2015, and New York's bars anyone from requiring certificate language the policy does not support. Texas covers the subject in Insurance Code chapter 1811: a certificate may not alter the policy, give the holder a contractual right, or reference the requirements of other contracts such as construction contracts, and a certificate issued or required in violation is void. A willful violation carries a civil penalty of up to $1,000 per violation. See Texas and New York, and check the state that governs your project.
The practical effect is that a contract clause saying "the certificate must state that the policy complies with Section 12" is asking for something many states do not allow. The right ask is the policy endorsement.
Ask for the endorsement, not only the certificate
When a contract requires additional insured status, waiver of subrogation or primary and noncontributory wording, ask the insured's broker for copies of the endorsements, or at minimum the forms schedule that lists their numbers. For additional insured status on a commercial general liability policy, the forms to look for include CG 20 10 (ongoing operations) and CG 20 37 (completed operations); the details are in additional insured endorsements explained. A manuscript or carrier-specific equivalent may do the same job, but only the text can tell you.
A worked example (hypothetical)
Say a general contractor receives a certificate from a framing subcontractor for a six-month project. The reviewer finds:
- The general liability policy expires in three weeks. Coverage will not run to the end of the project, so the contractor diarizes a request for the renewal certificate and does not release the next payment until it arrives.
- The ADDL INSD box is marked Y, but the description of operations only repeats "additional insured as required by written contract" and lists no form numbers. The contractor asks for the endorsement.
- The umbrella is on a claims-made basis, and the contract specifies occurrence. The contractor sends the discrepancy back to the broker.
- The certificate holder is the contractor's trade name, not its legal entity. The reissued certificate corrects it, because a mismatch can cause friction when the endorsement names the wrong party.
- Workers' compensation is listed for the right state but expires before the project ends. Another renewal date goes on the calendar.
None of this requires legal expertise, only a checklist. The Certificate of insurance (COI) review checklist turns it into a repeatable routine, and managing subcontractor insurance and certificates explains what to put in the subcontract.
Handling certificates well
- Ask the insured's broker, not the insured. Certificates are issued by the agent or broker who placed the policy; an insured who types one up is creating a problem.
- Send the contract's exact insurance language with the request so the broker can match endorsements to the clause.
- Request the endorsements with the certificate and keep them in the same file.
- Name the holder precisely, with legal name and address.
- Calendar expirations for every certificate you hold, and ask for renewals before the policy expires. Software helps at scale; see Certificate tracking software and digital COIs.
- Treat odd certificates with suspicion. Altered or fabricated certificates exist; confirm with the issuing agency and the insurer when something looks wrong. See commercial insurance fraud: premium fraud and staged claims.
Key takeaways
- A certificate is a snapshot of policies on its issue date. It gives the holder no rights and does not change the policy.
- The ADDL INSD and SUBR WVD marks are claims. Status exists only if an endorsement on the policy provides it.
- Notice of cancellation reaches a certificate holder only if the policy or an endorsement grants that right.
- Many states, including Massachusetts, New York and Texas, regulate certificate wording, and contract language that asks a certificate to warrant compliance may be unenforceable or void.
- Ask for the endorsement pages, check dates and limits against the contract, and track expirations.