What is the purpose of a certificate of insurance?

The purpose of a certificate of insurance is to serve as a document that provides proof of insurance coverage to a third party. It is commonly issued by an insurance company or broker to an individual or organization that is seeking evidence of the insured's coverage. This certificate outlines the types of insurance policies the insured holds, the coverage limits, and the effective dates of the policies, thereby giving third parties the assurance that the insured has the necessary protection in place.

Certificates of insurance are widely used in various contexts, such as when a contractor needs to provide proof of liability insurance before starting a job, or when a business is required to show that it has specific types of coverage in order to enter a contract with another party. The certificate does not serve as a complete policy document and does not define the terms of the insurance but rather acts as a verification of coverage for specific risks.

Other options do not accurately describe the function of a certificate of insurance. A detailed summary of all insurance policies would be a comprehensive document outlining all policies held, rather than a singular proof of insurance. A summary of claims made against a policy would relate specifically to claims history and not coverage proof, while a contract between an insurer and policyholder would refer to the actual insurance policy itself, which provides