What is the main purpose of a Certificate of Insurance?

The main purpose of a Certificate of Insurance is to verify the existence and terms of an insurance policy. This document serves as proof that an insurance policy is in place and outlines key details such as the type of coverage, the insured party, the policy limits, and sometimes the policy effective dates. It is often used by businesses or individuals to provide verification to another party, such as a client or a vendor, that adequate insurance coverage is maintained.

The certificate helps to instill confidence that the insured has the necessary protection to assume certain risks associated with a contractual obligation or service. It is particularly useful in situations where proof of insurance is required before entering into contracts or business relationships, as it provides a clear and concise overview of the insurance coverage without delving into the complexities of the actual policy documents.

In contrast, the other options do not accurately represent the function of a Certificate of Insurance. A summary of business financial performance pertains to financial statements rather than insurance verification. A legal agreement between two parties indicates a contract, while a record of all claims made by an insured relates to the insurance claims process, which is separate from the verification of coverage provided by a Certificate of Insurance.