What is the primary purpose of a certificate of insurance?

A certificate of insurance primarily serves as evidence of insurance coverage. It is a document that provides details about an insurance policy, such as the types of coverage, policy limits, and duration of coverage. This certificate is often issued by an insurance company or agent and is commonly used to show that an individual or business has the necessary insurance protection in place.

The significance of this evidence can be seen in various situations, such as when businesses need to comply with contractual obligations requiring proof of insurance before entering into agreements with clients or partners. The certificate verifies that the insured party possesses the insurance coverage necessary to mitigate financial risk, making it an essential document in many professional and legal contexts.