Certificate of Insurance

A certificate of insurance provides evidence that a valid insurance policy is in force without disclosing the full policy terms. The most common format is the ACORD 25 (for liability) and ACORD 28 (for property), which are standardized forms used across the insurance industry. For apartment owners, COIs serve two primary purposes: proving coverage to lenders, investors, and municipal authorities, and verifying that contractors, vendors, and property managers carry adequate insurance before they perform work on the property.

Apartment owners routinely issue COIs to mortgage lenders, who require proof that the property is insured as a condition of the loan. The COI must name the lender as mortgagee and loss payee and must reflect limits that meet the loan agreement's requirements. Owners also receive COIs from contractors performing maintenance, renovation, or capital improvement work. Before allowing any contractor on the property, the owner should collect a COI confirming general liability coverage, workers' compensation, and commercial auto insurance, with the apartment owner named as additional insured.

A COI is not a guarantee of coverage—it is a snapshot of the policy's status on the date it is issued. Policies can be cancelled or modified after a COI is issued. To protect against this, apartment owners should require certificates that include a provision for advance notice of cancellation and should implement a tracking system to ensure certificates are renewed before they expire. Many property management platforms now automate COI tracking to prevent gaps.