Dear Friend,

Imagine hiring a contractor to renovate your commercial property.

You've done your homework.

The contractor has experience.

The price is reasonable.

The references check out.

And before the work begins, you request something every responsible property owner should request.

A Certificate of Insurance.

The contractor sends it over.

You review the document.

General Liability: $1 million.

Workers' Compensation: Listed.

Commercial Auto: Listed.

Everything appears to be in order.

You file the certificate away and authorize the work to begin.

Three weeks later, an accident occurs.

A visitor is injured near the construction area.

The injured person files a lawsuit naming both the contractor and your business.

You immediately contact the contractor's insurance company.

And that's when you discover something you never expected.

Having a certificate of insurance doesn't necessarily mean your business is insured under the contractor's policy.

This is a hypothetical scenario, but it illustrates an important contractual risk that business owners frequently misunderstand.

A Certificate of Insurance, commonly called a COI, is designed to provide information about insurance policies.

It may show the types of insurance carried, policy limits, insurance companies, and effective dates.

But here's what many business owners don't realize.

A certificate generally does not create coverage, change policy terms, or automatically provide additional insured protection.

It is evidence of reported insurance information—not a substitute for the policy itself.

That distinction matters.

A contractor may carry a General Liability policy.

But whether your business is protected under that policy depends on the actual policy language, applicable endorsements, contractual requirements, and facts of the claim.

Many commercial contracts require one party to provide Additional Insured status to another.

For example, a property owner may require a contractor to extend certain liability protection to the property owner for claims arising from the contractor's work.

That protection is commonly provided through an additional insured endorsement or qualifying policy provision.

But not every endorsement provides the same protection.

Some apply only to ongoing operations.

Others address completed operations.

Some require a written contract.

And many contain limitations regarding the scope of coverage.

The wording matters.

Simply having your company's name typed onto a certificate does not, by itself, establish additional insured status.

Insurance and contracts work together.

A properly drafted agreement may establish insurance requirements, indemnification obligations, and responsibilities between the parties.

But a contract cannot automatically make an insurance company cover obligations that fall outside the policy.

And contractual indemnification provisions can create financial responsibilities that deserve careful legal review.

That's why I encourage business owners to involve both their insurance professional and legal counsel when evaluating significant contractual risks.

The best time to review these requirements is before the agreement is signed and the work begins.

Not after an accident.

A certificate may confirm that insurance has been reported. It does not guarantee that your business is protected from a particular claim.

That is a distinction every contractor, property owner, and business leader should understand.

Protection requires more than collecting documents.

It requires understanding what those documents actually accomplish.

Before allowing a contractor or subcontractor to begin work, consider these questions:

1. Does the contractor carry the appropriate insurance?

Evaluate the type of work being performed and the coverage that may be needed.

2. Does the contract require additional insured protection?

If so, determine whether the applicable policy and endorsements satisfy that requirement.

3. Are the insurance limits appropriate for the exposure?

A $1 million limit may be adequate for some projects and insufficient for others.

4. Have the relevant endorsements been reviewed?

When necessary, request the actual endorsement or other appropriate policy evidence rather than relying solely on the certificate.

These questions can help uncover issues before they become expensive disputes.

This week, locate a Certificate of Insurance you received from a contractor, vendor, or subcontractor.

Review it carefully.

Then ask yourself:

"Do I understand exactly what this certificate proves—and what it doesn't?"

If the answer is no, contact your insurance professional.

That conversation could help identify an important protection gap.

Insurance documents can appear simple.

Understanding their consequences often requires a deeper look.

The Prestizia Protection Playbook shares practical lessons about protecting businesses, recognizing risk, and making informed decisions.

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Before you file away another insurance certificate, remember this:

The most important question isn't whether someone has insurance. It's whether the insurance actually addresses the risk you're trying to protect against.

And as I always say:

Having insurance and being protected are not the same thing.

Protecting what matters,

John Crist
Founder, Prestizia Insurance
Founder, The Protection Circle
Author, The Prestizia Protection Playbook