Certificate Of Insurance
A Certificate of Insurance (COI) is a document issued by an insurer, broker, or insurance producer providing evidence of active property/casualty insurance coverage. It summarizes key policy details like insured name, coverage types, limits, and effective dates, but it is not the insurance policy itself and does not replace policy terms. This certificate is commonly used to verify that a vendor or supplier maintains the required insurance before performing work or delivering goods.
In a manufacturing operation, the certificate of insurance functions as a vendor-control gate. During supplier onboarding, procurement requests a COI and checks that the buying company is named as certificate holder, coverage limits match contract requirements, and effective dates are current. On the plant floor, outside crews unloading raw materials, installing equipment, maintaining racking, servicing forklifts, or performing hot work must have a valid COI on file before they are granted site access. In inventory management, the COI does not track quantities but instead tracks risk eligibility for the upstream supplier that feeds the material stream. An expired or noncompliant certificate can trigger a hold on receiving, a block on new purchase orders, or a renewal request before the next shipment arrives. This fast screening tool reduces third-party risk because a supplier accident or contractor mishap can interrupt production, damage assets, or create recall-related losses.
What does a COI verify for a manufacturing supplier?
A COI verifies that the supplier had active property/casualty insurance coverage on the issue date. It summarizes policy essentials such as coverage type, limits, policy number, and effective dates, but it is not the policy itself and does not guarantee claim payment.
Does a COI guarantee claim payment after a plant incident?
No. The certificate is not the policy and does not override policy terms. Claim handling depends on the actual policy's exclusions, conditions, limits, and endorsements. A COI only provides evidence that coverage was reported in force on the issuance date.
When should procurement require a COI from a supplier?
Procurement should require a COI before vendor onboarding, before contractor mobilization, before a supplier enters the facility, and before goods are delivered when the contract requires it. It should also be revalidated periodically and whenever coverage renewal or supplier status changes.