Legal Definitions - certificate of insurance

A certificate of insurance is an official document issued by an insurance company or its authorized agent. It serves as proof that a specific insurance policy is currently active for an individual or entity. While it does not contain all the detailed terms, conditions, and exclusions of the full policy, it provides a concise summary of key information. This typically includes the type of coverage, policy limits, the policyholder's name, and the effective dates of the coverage. It is frequently requested by third parties who need assurance that another party has adequate insurance coverage in place.

Here are some examples to illustrate how a certificate of insurance is used:

• Contractor for Home Renovation:

  Imagine a homeowner hiring a general contractor to remodel their kitchen. Before work begins, the homeowner wants assurance that the contractor has liability insurance in case an accident occurs, such as a worker getting injured on the property or accidental damage to the home during construction.

  The contractor would provide the homeowner with a certificate of insurance. This document confirms that the contractor holds an active liability policy, outlining the coverage limits and policy period, without needing to share the entire, lengthy insurance policy document. It gives the homeowner peace of mind that potential liabilities are covered.

• Event Organizer for a Public Festival:

  A community group plans to host a large outdoor festival at a city park. The city requires the group to have general liability insurance to cover potential incidents, such as an attendee being injured or damage to park property during the event.

  To secure the park permit, the community group's insurance provider would issue a certificate of insurance directly to the city. This certificate acts as official proof that the group has the required coverage, specifying the policy limits and effective dates, assuring the city that potential risks are financially covered without needing to review the full policy.

• Business Vendor for Corporate Services:

  A small catering company wants to become an approved vendor for a large corporate office building. The building management requires all vendors working on their premises to carry specific types of insurance, such as commercial general liability and workers' compensation, to protect against various risks.

  The catering company would submit a certificate of insurance to the building management. This document quickly verifies that the catering company has the necessary insurance policies in place, detailing the types of coverage, policy numbers, and expiration dates. This allows the building management to confirm compliance with their vendor requirements efficiently.