Posted in Finance, Accounting and Economics Terms, Total Reads: 84
Definition: Insurance Certificate
Insurance certificate is a written record which is issued by the insurance company or the broker who acts as an agent to sell the policy to the consumer. This certificate acts as a proof of the insurance policy which is currently covering the ones who has purchased it. The certificate primarily lists all the guidelines under which the policy holds true and is null and void under what circumstances.
The most important thing which the insurance certificate states is the date till which the policy is effective and it also states the insurance coverage i.e. the amount upto which cover is provided. This certificate of insurance provides as the proof that the person concerned is covered under insurance. This is generally demanded in cases where liability and losses can be a matter of concern. This insurance certificate proves that certain amount of losses will be covered by the insurance in case of some mishap or unfortunate event against which that person is insured.
For example: There is an agency which provides drivers to various other companies as a temporary allotment. One of the companies would want to hire a particular driver. Before hiring the driver, the company may tell the agency to produce an insurance certificate. This insurance certificate will reassure the company that the person being hired is covered under insurance. Certain liabilities and losses would be covered by the insurance itself in case of a mishap or accident. This would prevent the company from incurring too many losses in case of damages.