Lesson 3: Certificate of Insurance
Unit 1: Definition of Certificate of Insurance
A certificate of insurance (COI) is a document that contains all the essential details of an insurance policy. It encompasses a complete snapshot of the policy on a single form, including the most pertinent aspects, such as:
Policy holder’s Name
Policy Effective Date
Type of Coverage
Certificate of insurance is a document issued to the insured confirming that there is a valid insurance in place with the insurance company which has issued it. In other words, a certificate of insurance is issued by the insurer to the insured to serve as evidence of the insurance contract.
A copy of it shall serve as evidence of compliance for the insured whenever he is asked to produce it by the relevant authority. The various classes of insurance where certificate of insurance must be provided are:
a. Motor insurance
b. Marine insurance
c. Group life assurance
The contents of a certificate of insurance vary from one insurance class to the other. However, the following are some of the contents that are common to all the classes of insurance that require insurance certificates:
a. Name of the policy holder
b. Effective date of commencement of insurance
c. Date of expiry of insurance
d. The description of the risk covered
Unit 2: Four reasons why certificates of insurance are essential:
1. Proves your insurance status.
The COI is a summary of an insurance policy. It effectively serves as proof of insurance, without the bulk of the policy itself.
2. Provides quick access to information.
A COI constitutes an ‘express’ version of an insurance policy; this convenience could save you dozens of hours of work each year.
3. Reduces liability.
By carefully documenting certificates of insurance from all third-party vendors, you’re setting yourself up nicely for transferring loss to that third party’s insurer in the event of something gone wrong.
4. Protect yourself when you outsource.
Contingent work comes with a unique set of insurance hazards. Performing due diligence and checking each vendor’s insurance policy against your insurance requirements could save you from multiple scenarios risking costly litigation and affecting the profitability of your ventures.
Scroll Down to Select Page 5 for the next topic – Lesson 4: The Policy Documents
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