Why Get a Certificate of Insurance?

A certificate of insurance provides good general information about one party's insurance policies in a standardized form. Instead of providing entire insurance policies, the certificate allows for the quick transmittal of relevant information.

Definition

A certificate of insurance is a one-page document that provides evidence of certain insurance coverages maintained by the party providing the certificate. It is essentially a summary of the declarations page of an insurance policy.

Purpose

Many business transactions require the parties to evidence certain insurance coverages to each other. A certificate of insurance can document the required coverages and limits in a standardized format.

Format

Much of the insurance industry uses standardized certificate forms that immediately are recognizable to most parties.

Benefits

A single page certificate is much simpler to transmit and when required in bulk than a lengthy insurance policy. Additionally, the certificate does reveal proprietary business information often captured in the body of insurance policies.

Disadvantages

The certificate does not provide details as to limitations of coverage and does not offer any actual insurance coverage to the party receiving it. A certificate is merely a statement that a policy is in force and representations on the certificate do not actually modify the underlying insurance policy.

References

• International Risk Management Institute: Contractual Risk Transfer: Certificates of Insurance

Resources

• Acord