What is the main function of a "Certificate of Insurance"?

The main function of a "Certificate of Insurance" is to provide evidence of insurance coverage to third parties. This document serves as proof that an individual or organization holds an active insurance policy and specifies the types of coverage, policy limits, and effective dates. It is commonly required in various situations, such as when a contractor is working on a job site where a business or property owner needs assurance that the contractor has adequate insurance to cover potential liabilities.

The certificate effectively communicates the essential details of the insurance coverage without disclosing the entire policy's terms, making it a convenient tool for stakeholders who require confirmation of insurance to mitigate their own risk. This is particularly important in professional interactions or agreements where liability concerns are prevalent, ensuring all parties are aware of the coverage in place.