Office of Risk Management

Facilities Management Building
411 Pioneer Drive
Rochester , MI 48309-4482
(location map)
(248) 370-4929
Fax: (248) 370-2601
riskmgmt@oakland.edu

Understanding Certificates of Insurance

What is a Certificate of Insurance and why do I need it?

A certificate of insurance (COI) is a snapshot of an insurance policy, which contains the most important details of the policy and helps protect the University against third-party risk.

Commonly Used Insurance Definitions

Commercial General Liability (CGL) - a standard insurance policy issued to business organizations to protect them against liability claims for bodily injury (BI) and property.

Auto Liability – Insurance that provides financial protection for drivers who harm someone else or their property in a car accident.

Workers’ Compensation - insurance that provides wage replacement and medical benefits to employees injured in the course of employment.

Employer’s Liability – covers legal defense costs when an employee blames the employer’s negligence for his/her injury or illness.

Professional Liability - coverage designed to protect individuals with a professional designation and/or license (e.g., accountants, attorneys, engineers, architects) and quasi-professionals (e.g., real estate brokers, agents, consultants) against liability incurred as a result of errors and omissions in performing their professional services.

Umbrella/Excess Liability – coverage provided in excess of an underlying liability policy. The sole purpose is to provide additional limits of insurance.

Sexual Abuse and Molestation (SAM) - provides coverage for allegations of “wrongful acts” or negligence should an injury occur as a result of sexual abuse.

Cyber Liability - covers financial losses due to cyberattacks or other tech-related risks, as well as privacy investigations or lawsuits following an attack.

Technology Errors & Omissions – provides coverage when a company makes a mistake or forgets to do a critical task that hurts a client financially. These mistakes can range from recommending inappropriate technology to failing to meet project deadlines.

Additional Insured - an additional insured refers to anyone other than the policyholder who is covered by an insurance policy.

How to Read a Certificate of Insurance (COI)

Make sure the Insured (business/contractor/vendor) name listed on the form matches the business/contractor/vendor you’re hiring. Read the certificate from left to right.

Verify that the policy expiration date does not come before the completion date of your project. If it does, ask the vendor to submit another COI confirming the policy’s renewal.

Make sure the business/contractor/vendor has at the very least:

General Liability (CGL)

Auto Liability (if driving on campus) Excess Liability (Umbrella)

Workers’ Compensation (if working on campus)

Determine that the business/contractor/vendor has liability limits that meet or exceed the limits listed in Risk Management Exhibits “B” Construction Projects and/or “C” Vendor/Activities.

In rare cases, business owners will present counterfeit Certificate of Insurance because they can’t afford to maintain genuine insurance. If you have any reason to doubt the authenticity of the insurance certificate presented, request the COI directly from the Producer (insurance agent or broker) listed on the certificate.

“ACORD” Certificate of Insurance - What should be listed on the Certificate

Top left hand side of the insurance form - read from left to right

Box #1 - Producer - The Producer is the Insurance Agent.

Box #2 - Insured - The Insured is the Business Entity with whom you are doing business. Top Right hand side of the insurance form

Box #3 - Date (mm/dd/yyyy) Issue date of the insurance certificate

Box #4 - Insurers Affording Coverage - Insurance Companies providing the insurance coverage.

Box #5 - National Association of Insurance Commissioners (NAIC) - Number associated with a national database that contains the insurance company profile.

Main Body of the Form - Coverages

Box #6 - Insurer Letter - This letter corresponds with the Insurers Affording Coverage box.

Box #7 - Addl Insured - This box should be checked if Oakland University is listed as additional insured for the specific type of insurance (usually General Liability).

Box #8 - Type of Insurance - The Type of Insurance Coverage is listed here, i.e. General Liability, Auto Liability, Umbrella/Excess, Workman's Comp, etc.

Box #9 - Policy Number - The policy number for the insurance coverage.

Box #10 - Policy Effective Date - The start date of the policy.

Box #11 - Policy Expiration Date - The end date of the policy.

Box #12 - Insurance Limits - The limits of the insurance coverage.

Box #13 - Description of Operation/Location, Exclusions, Endorsements, Special Provisions - Additional Insured language, etc. is listed in this box.

Bottom of the Form

Certificate Holder - Is the entity receiving the document. Oakland University, Rochester, MI 48309 should be listed as the Certificate Holder.

Authorized Signature - Signature of the insurance agent issuing the certificate.

Frequently Asked Questions

I received a certificate of insurance from a vendor, what do I do with it?
Certificates of Insurance should be sent to the Risk Management email riskmgmt@oakland.edu. Departments are advised to retain a copy of the certificate for their own file as a reminder to request an updated certificate (as needed).

I need to know if a vendor has insurance on file and I don't have access to BDM, who I contact to confirm the university has an approved certificate of insurance on file?
If you are working with Purchasing the Buyer will verify if there is insurance on file.  If you are not working with Purchasing contact Risk Management at riskmgmt@oakland.edu to verify if the vendor has insurance on file.

Does every vendor that the university works with require insurance?
Yes, unless the activity or specific purchase is listed on Exhibit D – Approved Vendor/Activities Insurance Waived. If the activity or specific purchase is not listed on the Risk Management Policy 1050 Exhibits B, C & D the minimum insurance requirements are as follows: Commercial General Liability: $1M per occurrence/ $2M aggregate

Auto Liability (if driving on campus): $1M Excess/Umbrella: $1M

Workers' Comp: Statutory Limits

Employer's Liability: $1M (if working on campus)

Does Risk Management have to approve a Certificate of Insurance before I submit my requisition to Purchasing?
No. If the vendor's insurance certificate does not match the Minimum Insurance Requirements listed in Exhibits B & C the department is required to complete the Risk Management Request for Insurance Review form.

Is there a calculation used to determine if the certificate of insurance contains sufficient coverage?
If the total combined limits for General Liability and Excess Umbrella equal or exceed the amount listed in the exhibit then the insurance requirement is acceptable.

See example below:

Ex. 1 - General Liability - $1M + Excess - $5M = $6M General Liability Limit

Ex. 2 - Auto Liability - $5M + Excess Umbrella - $5M = $10M Auto Liability Limit

Why do dates on the certificate of insurance not match? What expiration date should be used to request a new certificate of insurance?
Certificates may have different effective/expiration dates listed because the company has several policies that do not always go into effect at the same time. Best practice for requesting an updated certificate of insurance is to use the earliest expiration date listed on the certificate. Is Workers' Compensation required if the vendor or service provider is self-employed? A person who owns a business alone is the “sole proprietor,” which means that the business is not a partnership, limited liability company, or corporation. Since a sole proprietor is not employed by another person, he or she is not required to have workers’ compensation insurance. However, if that person employs other people, workers’ comp coverage would be required.

I’m a consultant, do I need insurance?
Yes. While the type of insurance required depends upon the scope of work specified within the contract terms and conditions, at a minimum consultants must provide proof of a small business commercial liability insurance policy with minimum limits of $1M.

Who should be listed on the Certificate of Insurance as the “Certificate Holder”?
The certificate holder is the entity to whom the certificate of insurance is issued. Oakland University, Rochester, MI 48309-4401 should be listed as the certificate holder.

If a Waiver or release has been signed by event participants, are insurance certificates with OU listed as additional insured still required of the vendor?
Yes. Activities requiring a signed waiver MUST still comply with the minimum insurance requirements listed on Risk Management’s website.

What does “Additional Insured” mean?
An "additional insured" is a person or organization also entitled to the benefits and protections extended under an insurance policy purchased by a vendor. An endorsement to the vendor’s policy is typically required to achieve the additional insured status. The additional insured is only insured under claims that arise out of operations performed by or on behalf of the additional insured.

Why do I need an Umbrella/Excess policy?
Umbrella/Excess liability provides additional insurance limits coverage above a vendor’s primary general liability (CGL) and/or commercial automobile liability (AL) policy. Umbrella/Excess insurance is designed to protect against serious losses which might ultimately jeopardize the vendor’s financial stability.

Why do I need Professional Liability Coverage?
Professionals (e.g. accountants, engineers, attorneys, architects) are expected to have extensive knowledge or training in their particular area of expertise. They are expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they may cause.

What is the difference between Cyber Liability, Technology Errors and Omissions (E&O), and Crime Insurance?

Cyber liability covers a business’s liability for a data breach when customers’ personal identifiable information (PII) such as social security or credit card numbers are either inadvertently exposed or stolen by someone who has gained access to the company’s electronic network.

Technology E&O insurance coverage protects a company when its technology services and/or products fail to perform as specified. Examples include: If a software product or electronic data processing system operates incorrectly or not at all, the company’s client may suffer financial loss from downtime or lost business. If a lawsuit or claim for damages results from an alleged error or omission, the technology E&O coverage can provide defense costs and financial damages that the policyholder may be legally obligated to pay.

Crime insurance typically provides reimbursement to the University for any Damages related to: employee dishonesty, forgery or alteration, computer fraud, funds transfer fraud, counterfeit money, and mysterious disappearance of money and securities.

Thank you for taking the time to review and understand Certificates of Insurance.

If you have additional questions email the Office of Risk Management at riskmgmt@oakland.edu