What is a certificate?

A certificate of insurance states that certain coverage is in effect, how much and for what. This document is often required when a contractor takes on a new job. The broker or agent will prepare the paperwork that can be given out when a new contract is set up.

Some insurance companies will issue these certificates upon request of the broker but it is more common that the agent or broker does this paperwork on behalf of the insurance company. When the policy documents are issued there can be a certified copy provided that is mailed to the additional insured named on the policy.

It is important to remember that a certificate is only valid for the day it is written. The insurance could be canceled at any time. Often there is a requirement that 30 days notice is to be given to the certificate holder if the insurance is to be cancelled.

It depends on the needs of the person or company requesting the certificate as to whether or not that person or company is named as an additional insured. Sometimes all that is is wanted is a "to whom it may concern" notation.

A certificate will name a mortgage or lien holder. If you have leased equipment or machinery then you will likely need a certificate. If you lease your building then your landlord will want to be sure that insurance is in place and that they are told if you stop your policy.

Your insurance broker or agent is best able to help you fulfill the needs for your certificates if you provide a copy of what that certain company or person has requested. Take control of your insurance. Be sure that you are buying what you need, when you need it. Ask questions and get answers that you clearly understand.