Certificate of Insurance Law and Legal Definition

Certificate of insurance is a document issued by the insurance company or insured as an evidence of the insurance. The certificate is not a substitute for the actual policy, and is normally a non-negotiable document which cannot be assigned to a third party. It is also unacceptable under the terms of a letter of credit and in making claims. It just shows an abstract of the most important provisions of the insurance contract including the name of the insured, relevant dates, description of the insured property and notice of cancellation. However, under certain situations, the insured may assign his/her rights under the certificate of insurance to a third party, usually the consignee, by endorsing the reverse of the certificate. In marine insurance where cargo is insured against a floating insurance policy, a certificate of insurance serves to assure the consignee that insurance is in effect for the goods in transit and a proper policy will follow.