Insurance is required in a vast number of contractual and financing scenarios, including mortgage lending, leases and construction contracts, among others. Most times, a third party requires the named insured to maintain certain types and/or amounts of insurance. Historically, the issuance of a “certificate of insurance” has served as proof that this requirement has been met. But is this enough?
According to Black’s Law Dictionary (9th ed. 2009), a certificate of insurance is a “document acknowledging that an insurance policy has been written, and setting forth in general terms what the policy covers.” While, on the surface, such a document would appear to satisfy the requirement for proof of insurance, the insurance industry’s standard forms of insurance certificates render them virtually worthless as reliable evidence of the existence or terms of coverage.
