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What is an Insurance Certificate?

In simple terms, a certificate of insurance (COI) is an official document issued by an insurance company to the policyholder. The certificate of insurance is issued to businesses to verify the legality of their insurance policy. The certificate also contains all information related to the terms, conditions and rules of the insurance policy in question as well as the name of the policyholder, details of coverage, and dates of policy validity and expiry.

 

A certificate of insurance is helpful in proving that the businesses are financially protected through insurance against liabilities like workplace injuries, accidents, etc. So, clients can be assured that these businesses are reliable and trustworthy to conduct business with. Without a valid Certificate of Insurance, many businesses may find it difficult to get clients. In this article, we’ll talk about a few things you should know about certificates of insurance.

What do Insurance Certificates Need to Include?

There are a few essential pieces of information that need to be included in a Certificate of Insurance for it to be valid.

 

They include:

 

  • Name of the policyholder

  • Validity of the insurance policy

  • Level of coverage offered

  • Terms and conditions of the insurance policy

When is a Certificate of Insurance Required?

A company needs to provide a certificate of insurance whenever a client asks for proof of insurance. It is also important to keep your certificate of insurance updated whenever there are any changes made in the insurance policy so that all new points are reflected accurately. A company may also be asked to present a certificate of insurance when dealing with a government agency to prove that they are complying with all insurance requirements as mandated by the relevant governmental authority. A certificate of insurance gives assurance to clients that your business is secure and safe to make trades with. Individuals may also be required to present a certificate of health insurance in certain cases, like travelling to a different country or attending some special events, etc.

How Long Does it Take to Issue a Certificate of Insurance?

Certificates of insurance are issued by insurance companies to their policyholders. An electronic or e-certificate of insurance can be issued soon after the activation of the policy. However, it may take a few days for the insurer to ship out a physical certificate of insurance to the policyholder’s address. The number of days it may take depends on the location of the policyholder, how fast the insurance company ships the certificate and the type of courier/delivery service used by the company. Depending on the above-listed factors, it may take anywhere between a couple of days to a few weeks for a certificate of insurance to be issued and delivered.

How Long Should the Certificate of Insurance be Stored?

As recommended by legal experts, a certificate of insurance must be stored at least for a period of 5 years at the absolute minimum. However, it is a good idea to check your local government rules about the minimum requirements for storing the certificate of insurance as it may be higher than 5 years. It is also a good practice for companies to have physical backup copies of the certificate as well as digital ones in case the original goes missing or is misplaced.

What Security Concerns are Involved with Certificates of Insurance?

While the chances are low, some businesses that do not have a legitimate certificate of insurance may choose to present a duplicate or forged certificate to their potential clients in order to secure business transactions. In case the local government bodies have introduced new regulations regarding insurance for businesses, some may choose to keep using their old certificates that do not comply with the new rules. Moreover, some businesses may also use expired or outdated certificates of insurance. It is the responsibility of clients who are dealing with businesses to ensure that their certificates are legal and up to date.

To Conclude

A certificate of insurance is a valuable business tool that corporations and small firms need to have in order to conduct business with potential clients and governmental agencies. It provides assurance to clients that the business is protected against liabilities and thus, is reliable. Businesses also need to ensure that their certificate of insurance is up to date as per their latest insurance rules and is also compliant with the local governmental regulations. However, clients must confirm the validity of certificates provided by businesses to make sure that they are not being scammed. 

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FAQs on Certificates of Insurance

  • ✔️Who issues the certificate of insurance?

    A certificate of insurance is issued by the insurance provider to the policyholder (usually businesses). 

  • ✔️Why is it important to have a certificate of insurance?

    Businesses need to have a legitimate certificate of insurance in order to do transactions with clients and governmental agencies. 

  • ✔️How long does it take for a certificate of insurance to be issued?

    While a digital or e-certificate may be issued in just a few hours of the activation of the policy, it may take a few days or weeks for the physical certificate to reach the policyholder’s location. 

  • ✔️Can I get my certificate of insurance online?

    You can get your certificate of insurance online by logging in to your insurance provider’s website and downloading the certificate. 

  • ✔️Can I buy insurance online?

    Yes, you can buy health insurance online at Bajaj MARKETS and other insurance websites.