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DOCUTRAX Resource Center

The information contained on this web site is for general educational purposes and shall not be construed to infer provision of insurance or business advice of any kind. Visitors with specific questions should seek the advice of a qualified insurance or legal professional.

Test Your Certificate of Insurance Knowledge - True or False?

Altering a Certificate of Insurance automatically alters the insurance policies shown on the COI.

False. A Certificate of Insurance is NOT an insurance policy, and does not serve to provide, endorse, amend, extend or alter in any way the terms of an insurance policy. Only an endorsement, rider or amendment to the policy can effect changes in coverage. Reference to a contract between the client and a third party on a certificate does not provide coverage.

Certificates of Insurance are not necessary in today's business world.

False. Policyholders may request a certificate of insurance for many reasons. For example, a building owner is requesting information about the existence of liability insurance coverage from a tenant. A mortgagor of a building is requesting information about the existence of property insurance coverage upon closing. A lessor of equipment wants information about the existence of property insurance coverage while equipment is in possession of the client.

It is necessary to have separate Certificates of Insurance evidencing property and liability insurance coverage.

True. Typically, a property insurance policy obligates the insurer to notify the mortgage holder in the event of policy cancellation. A typical liability insurance policy obligates an insurer to notify only the first named insured and no one else of policy cancellation, unless the policy is endorsed to provide notice to another party. For this reason, it is recommended that separate certificates are requested.

A Certificate of Insurance is the same as an Insurance Binder.

False. A certificate of insurance is proof of certain coverage at a certain time. An insurance binder is a contract. Therefore a certificate of is insurance is not the same as an insurance binder.

The Certificate Holder is the entity to which the certificate of insurance is issued and is not entitled to any rights of the policies stated on the Certificate.

True. To have access to the policies, the Certificate Holder must also be named as an additional insured on the actual insurance policy.