What is the function of a certificate of insurance?

The function of a certificate of insurance is to serve as official documentation of coverage for someone other than the named insured. This document provides evidence that an individual or organization holds an insurance policy and outlines essential details such as the types of coverage, the effective dates, and the limits of liability. Stakeholders, such as vendors, clients, or other third parties, often require this certificate to confirm that the insured party has the necessary insurance coverage in place before agreeing to engage in business or enter into contracts.

Other options refer to specific policy details that a certificate of insurance does not directly address. For example, while the deductible amount and limits of liability are crucial aspects of an insurance policy itself, they may not be explicitly detailed in a certificate. The document is meant primarily for verification of coverage rather than for specifying intricate policy terms or limits.