A certificate of insurance is a one-page proof of coverage that businesses are frequently required to provide to clients, landlords and vendors.
What a certificate shows
A certificate of insurance summarizes the existence and key terms of a business insurance policy. It typically lists the insured business, the carrier, the types of coverage in force, the policy limits and the policy period. Importantly, the certificate is evidence of coverage; it is not the policy itself and does not change the terms of the underlying policy.
Certificates are commonly requested before a contract is signed, before a vendor begins work, or as a condition of a commercial lease. The party requesting the certificate wants assurance that the business carries adequate coverage before they take on the associated risk.
Additional insured requests
Frequently the requesting party asks to be named as an additional insured. This is accomplished through an endorsement to the policy, and it extends certain protections of the policy to that party. Because adding an additional insured changes the policy, it is handled by the carrier, not simply written onto the certificate.
Understanding the difference between merely receiving a certificate and being named as an additional insured is important, because the two provide very different levels of protection. Businesses should keep clear records of which certificates they have issued and which include additional insured endorsements.
Handling requests efficiently
Because certificate requests often arrive with tight deadlines, having an organized process saves valuable time. Keep a record of your current policies and their key terms readily available, and establish a reliable point of contact with your agent for requesting certificates quickly.
Maintaining a file of the certificates you have issued, along with the certificates you have received from vendors and subcontractors, completes the administrative picture and protects your business if a question about coverage ever arises.