What Is a Certificate of Insurance?

A certificate of insurance is a standardized one-page summary, most often on an ACORD form, issued by the contractor's insurer or broker. It is not the policy itself. It is proof that a policy exists and a summary of its key terms. The COI lists the insured contractor's name, the insurance company, the policy numbers, the types of coverage, the coverage limits, and the effective and expiration dates.

Reading a COI takes a minute once you know where to look. The most important lines are the coverage types and their limits, and the policy dates. If the dates do not span the period when work will happen on your property, the certificate is not useful to you. A current COI is the baseline document you should request from any contractor before they start.

General liability is the coverage that pays for property damage and third-party bodily injury the contractor causes during the work. On the COI you will see a per-occurrence limit and an aggregate limit. The per-occurrence limit is the most the policy pays for a single incident, and the aggregate is the most it pays over the policy term.

For residential projects, a common general liability limit is one million dollars per occurrence and two million aggregate, though smaller jobs may carry less. The right limit depends on the size of your project and the value of your property. A major remodel deserves a higher limit than a single-room repaint. If a contractor's general liability limit looks thin relative to your project, that is a fair question to raise before signing.

Workers' compensation coverage pays for medical bills and lost wages if a worker is injured on the job. For a homeowner, this is one of the most important lines on the certificate. If a contractor has employees but no workers' comp, an injured worker could turn to the homeowner's property insurance for a claim, which is exactly the exposure you want to avoid.

Some solo contractors are exempt from carrying workers' comp in certain states because they have no employees. If that is the case, ask how the contractor handles injury risk and whether any helpers on site are covered. When a crew of several people will be working on your property, a workers' comp line on the COI should be present and active.

Being named as an additional insured means the contractor's insurer extends certain protections of the policy to you for the project. If a covered claim arises from the contractor's work, additional insured status can let you benefit from the contractor's coverage rather than relying solely on your own. For larger projects, requesting to be added as an additional insured is a reasonable and common practice.

The contractor requests this from their insurer, who issues an updated certificate showing your name in the additional insured section, sometimes with an endorsement attached. There may be a small administrative cost. For a significant remodel or addition, the protection is usually worth it. For a minor repair, a current standard COI is often sufficient.

A certificate is only meaningful if it is genuine and current, so verification matters. The COI lists the insurer or broker and a contact. Call that office and confirm the policy is active, the limits match, and the dates are current. A legitimate broker will confirm coverage for a named certificate holder. This step catches the rare case of an altered or expired certificate.

Also confirm the named insured on the COI matches the business name on your contract and bid. A mismatch, such as a certificate in a different company's name, is a warning sign. The few minutes this takes can save you from discovering after an accident that the coverage you relied on did not actually apply to the contractor doing your work.

On ContractShield, the certificate of insurance step is part of contractor verification rather than something a homeowner has to chase. The platform collects insurance documents and reviews them through tiers from basic to Verified Pro, and only contractors who have submitted current documents can bid on larger projects. That means the homeowner starts from a pool that has already cleared a document review.

This does not remove your right to confirm details for a big job. You can still ask for additional insured status and verify limits directly. What changes is the starting point. Instead of requesting a COI from an unknown contractor and hoping it is real, you select from contractors whose documents have already been collected and checked.