Protect Your Church: The Truth About Certificates of Insurance

When your church works with contractors, vendors, or renters, you’ll often be asked to provide — or request — a Certificate of Insurance (COI).

A COI is a simple one-page document that summarizes insurance coverage. It’s not the full policy, but it serves as important proof that coverage exists.

Why Certificates of Insurance Matter

• Proof of Coverage: A COI shows that your church (or another party) has active insurance in place — like liability, property, or workers’ compensation coverage.

• Protection from Unexpected Costs: If your church hires a contractor who isn’t properly insured and someone gets hurt, your church could end up being responsible. Requesting a COI helps protect your church from being charged for someone else’s accident or damage.

• Documentation for the Future: Claims can arise years later. Having a COI on file helps prove that insurance coverage existed at the time of work.

• Avoid Waiving Requirements: If you forget to ask for a COI before work begins, courts might view that as waiving your right to require insurance — even if your contract says otherwise.

• Helpful in Disputes: In some cases, a COI can serve as evidence if an insurance agent made an error or failed to secure the proper coverage.

Common Limitations and Pitfalls

COIs are useful, but they have serious limits — and many churches mistakenly assume they offer more protection than they do.

• No Guarantee of Coverage: The COI itself doesn’t provide insurance. It’s only a summary. To verify full coverage, the actual policy must be reviewed.

• May Not Reflect Reality: Sometimes, a COI lists coverage that’s been canceled or never finalized. A binder (temporary proof of insurance) is a more reliable early indicator.

• Doesn’t List Exclusions: A COI might show a liability policy but not the exclusions. For example, a tree removal company may provide a COI that hides 40+ exclusions — including ones that remove coverage for their actual work!

• Additional Insured (AI) Gaps: Even if the COI box is checked for “Additional Insured,” that coverage might not exist or meet contract requirements. One city found that 40% of COIs claiming AI coverage didn’t actually have it.

• Policy Limits May Be Reduced: The coverage limits listed on the COI could have been reduced or exhausted by other claims.

• Deductibles and Self-Insured Retentions (SIRs): These are rarely listed, meaning your church might not know about large amounts the insured party must pay before coverage applies.

• No Automatic Notice of Cancellation: Unless the insurance policy itself requires it, you won’t be notified if a policy is canceled or changed.

• Fraud Happens: Unfortunately, fake or altered COIs are sometimes used by contractors. Always verify COIs directly with the issuing agent or insurer.

When to Request a COI

Always request a COI when your church:

• Hires contractors or vendors (construction, lawn care, cleaning, etc.)

• Leases or rents property to outside groups

• Hosts events where third parties are involved

• Partners with another organization for ministry or community service

Keep a copy on file for each vendor or partner, and make sure it’s current before work begins.

Key Takeaway

A Certificate of Insurance is a vital tool for managing risk, but it’s not a substitute for reading and verifying the actual policy.Think of it as a snapshot, not the full picture.The safest approach is to:

• Require a COI from every outside party your church works with.

• Verify it directly with the insurer or agent.

• Review the policy when significant work or risk is involved.

• Ask your current agent for help reviewing to ensure accuracy/adequacy of the COI.

---

This content has been prepared by United Methodist Insurance Company (UMI) for informational purposes only. No article or document may accurately contemplate all possible scenarios or church resources. As such, this information is meant to foster discussion by the individual church and its members to develop a plan tailored to its own circumstances. UMI is providing this information with no warranties or guarantees of any kind and it should not be viewed as legal, financial, or other professional advice. All liability is expressly disclaimed. Any claim examples described herein are general in nature, may or may not be based on actual claims, and are for informational purposes only. Any coverage available for a claim is determined from the facts and circumstances of the claim as well as the terms and conditions of any applicable policy, including any exclusions or deductibles. In the event of a conflict with the content herein, the terms and conditions of any issued policy will control. Individual coverage may vary and may not be available in all states.

The commercial insurance coverages for United Methodist Insurance are sold and serviced directly or indirectly by Sovereign Insurance Agency (CA Lic. No. 0B01380) ("Sovereign") and underwritten by various available insurance markets. Sovereign pays United Methodist Insurance a royalty for the use of its intellectual property.