What Is a Certificate of Insurance and When You Need One
What a COI Contains
Most certificates of insurance follow the ACORD 25 format, a standardized form used across the US insurance industry. Understanding each section helps you verify that your certificate accurately reflects your coverage and meets the requirements of whoever is requesting it.
Named insured: Your business legal name as it appears on the policy. This must match the name on your Amazon seller account, commercial lease, or supplier agreement exactly. A mismatch, even something as minor as "LLC" versus "L.L.C." can cause a certificate to be rejected.
Insurer name and NAIC number: The insurance company providing coverage, along with their National Association of Insurance Commissioners number. This allows the certificate holder to verify that your insurer is licensed and financially solvent.
Policy types: Each type of coverage you carry is listed in its own section. Common sections on an ecommerce seller's COI include commercial general liability, commercial property, commercial auto (if applicable), umbrella/excess liability, and workers compensation.
Policy numbers: The unique identifier for each policy. The certificate holder can use these numbers to verify your coverage directly with the insurer if needed.
Coverage limits: The per-occurrence limit, general aggregate limit, products-completed operations aggregate, personal and advertising injury limit, damage to rented premises limit, and medical expense limit for each policy type. These numbers must meet or exceed the requirements specified by whoever is requesting the certificate.
Effective dates: The start and expiration dates of each policy. The requesting party will verify that the policy is currently active and will remain active through the relevant contract period. An expired certificate is as useless as no certificate at all.
Certificate holder: The person or organization that requested the certificate. Their name and address appear at the bottom of the form.
Additional insured: If the requesting party requires additional insured status, this is noted on the certificate, usually in the description of operations section or through a checkbox. Additional insured status means your policy extends coverage to the named party for claims arising from your business activities.
Description of operations: A free-text field where your insurer notes any special conditions, endorsements, or descriptions relevant to the certificate. This is where additional insured language, waiver of subrogation endorsements, and specific project descriptions are typically documented.
When You Need a COI
Amazon Seller Compliance
Amazon requires a COI from sellers generating more than $10,000 in monthly gross proceeds. The certificate must show commercial general liability with at least $1 million per occurrence, products-completed operations coverage, and Amazon.com Inc. and its affiliates and assignees listed as additional insured. Amazon reviews the certificate and updates your seller account status once compliance is confirmed. You upload the COI directly through Seller Central.
Commercial Leases
Landlords require a COI before you sign a lease for warehouse, office, or retail space. The certificate typically must show general liability with the landlord named as additional insured, and often commercial property coverage for your business contents within the leased space. Some landlords require specific minimum limits, such as $2 million aggregate, or additional coverage like damage to rented premises at $100,000 or higher.
Wholesale and Supplier Accounts
Many manufacturers and distributors require a COI before approving your wholesale account or shipping inventory on terms. The requirements vary by supplier but commonly include general liability and product liability coverage with the supplier named as additional insured. Having a certificate ready to provide when you apply for new supplier accounts speeds up the approval process.
Trade Shows and Events
Event venues and trade show organizers require exhibitors to carry general liability insurance and provide a COI with the venue named as additional insured. Requirements typically range from $1 million to $5 million in general liability depending on the event size. If you exhibit at multiple trade shows per year, you will need to request a new certificate for each event with the specific venue listed as certificate holder and additional insured.
Client and Partner Agreements
Business partners, large clients, and contractors sometimes require proof of insurance before entering into a business relationship. Service providers like marketing agencies, web developers, and consultants are commonly asked for COIs showing professional liability coverage. Product sellers entering distribution agreements may need to show both general and product liability coverage.
How to Get a COI
Your insurance provider issues certificates of insurance. The process is usually fast and free, though the method varies by provider type.
Online insurers like Next Insurance, Hiscox, and Thimble allow you to generate and download COIs directly from your online account dashboard. You can typically create unlimited certificates, specify different certificate holders and additional insureds for each, and download the PDF instantly. This self-service approach means you can produce a certificate at any time without waiting for an agent or customer service representative.
Traditional carriers and agents issue certificates through their office or customer service department. You contact your agent or the carrier's certificate department, provide the certificate holder's name, address, and any additional insured requirements, and they generate the certificate. Turnaround time varies from same-day to a few business days depending on the carrier's processes and workload. Some traditional carriers now offer online certificate portals that combine the convenience of self-service with the personalized coverage of an agent-placed policy.
Cost: Issuing a certificate of insurance is free with most providers. There is no limit on the number of certificates you can request. However, adding additional insured status to your policy may carry a nominal charge of $25 to $50 per additional insured, depending on the carrier. Many carriers include additional insured endorsements at no extra cost as a standard feature.
Additional Insured vs Certificate Holder
These two terms appear on every COI and mean very different things. Confusing them can lead to coverage gaps or rejected certificates.
A certificate holder is simply the party who receives the COI as proof that you carry insurance. Being listed as a certificate holder gives them no rights under your policy. It is purely an informational designation that lets them verify your coverage exists.
An additional insured is a party who has been added to your policy and receives actual coverage under it. If a customer sues both you and Amazon for a product you sold on the marketplace, your general liability policy covers Amazon's defense costs and any judgment against them because Amazon is an additional insured on your policy. This is meaningful legal protection that extends your policy's coverage to another party.
When a party requests "a certificate naming us as additional insured," they want both. They want the COI as documentation, and they want the additional insured endorsement on your policy for actual coverage. Simply listing them as a certificate holder without the additional insured endorsement does not satisfy this requirement, and many experienced risk managers will catch and reject certificates that only show certificate holder status when additional insured was requested.
Waiver of Subrogation
Some COI requests include a requirement for a waiver of subrogation. Subrogation is the process where your insurer, after paying a claim on your behalf, seeks reimbursement from a third party who was responsible for the loss. A waiver of subrogation means your insurer agrees not to pursue the requesting party for reimbursement even if they were partially responsible for the loss.
For example, if your warehouse floods due to a plumbing failure that was the landlord's responsibility, your property insurance pays for your damaged inventory. Normally, your insurer would then sue the landlord to recover the payout. With a waiver of subrogation in favor of the landlord, your insurer cannot pursue the landlord. The landlord requests this waiver to protect themselves from claims by your insurer.
Waivers of subrogation are common in commercial lease agreements and some supplier contracts. Most insurers add the waiver at no extra charge or for a nominal fee. The waiver is noted on the COI in the description of operations section.
Keeping Your COI Current
A COI is a snapshot of your coverage at the time it was issued. It does not automatically update when your policy renews, your limits change, or your coverage lapses. Keeping your certificates current requires active management.
At renewal: When your policy renews annually, request updated certificates for every party that holds a current COI. Amazon, your landlord, your suppliers, and any other certificate holders need the updated certificate showing the new policy dates. Some insurers send automatic renewal notices to certificate holders, but do not rely on this. Verify that every critical certificate has been updated.
If your policy lapses: A lapsed policy invalidates all outstanding certificates immediately. If Amazon discovers your policy has lapsed, they can restrict your account. If your landlord's insurance company discovers it, they may require immediate evidence of replacement coverage or consider you in breach of your lease. Never let a policy lapse without having replacement coverage already in effect.
When coverage changes: If you increase limits, add coverage types, or change carriers, the existing certificates no longer accurately represent your coverage. Issue updated certificates reflecting the current policy terms to all parties that rely on them.
Tracking system: Maintain a simple spreadsheet or list of every COI you have issued, including the certificate holder, additional insured status, required limits, and expiration date. Review this list at each policy renewal to ensure every certificate is updated. For businesses that issue many certificates, some insurers offer automated certificate tracking that handles renewal notifications and distribution.