Certificate of Insurance Defined
A certificate of insurance is a document verifying the holder has insurance coverage. Insurance companies and brokers issue certificates of insurance as proof of protection.
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Features
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A certificate of insurance will include important information regarding the policy, including the policy's effective date, types of insurance coverage, types of liability, and the dollar amount of applicable liability coverage.
Significance
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A certificate of insurance is often required when the potential for liability and large financial losses is present.
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Uses
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Lease or rental agreements involving vehicles, property, or equipment often require a certificate of insurance, as will certain jobs involving substantial risk.
Considerations
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A certificate of insurance is not a replacement for the actual policy, nor can it be assigned to a third party.
Types
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In health and life insurance, a certificate of insurance is issued to the members of a group insurance plan as proof of participation. In shipping, a certificate of insurance is issued to assure coverage for transported goods.
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