• Home
  • Get A Quote
  • Customer Service
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
 
CALL US AT 352.332.0180
Home
  • Home
  • Get A Quote
  • Customer Service
  • What We Offer
    • Auto Insurance
    • Business Insurance
    • Commercial Auto Insurance
    • Contractors Insurance
    • Home Insurance
    • Renters Insurance
    • Boat | Motorcycle | RV
  • Blog
  • Resources
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About Us
    • Location Map
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Auto Insurance PERSONAL AUTO
Auto Insurance COMMERCIAL AUTO
Homeowners Insurance HOME
Business Insurance BUSINESS
Toy Insurance TOYS
Contractors Insurance CONTRACTORS
Home > Blog > The Difference Between a Binder and a Certificate of Insurance
FRIDAY, DECEMBER 14, 2018

The Difference Between a Binder and a Certificate of Insurance

The Difference Between a Binder and a Certificate of Insurance

When you have business insurance policies you will often hear talk of your insurance binder and your certificate of insurance, but do you know the difference?

A binder is a contract of insurance. It's called a binder because it "binds" your coverage and creates an insurance contract and is used temporarily until the policy is issued.

A certificate of insurance is a form of proof of insurance warranting that you have coverage for a specific period.

Binders

An insurance binder is a brief document that serves as a temporary insurance policy. It remains in effect for a short time, typically 30 to 90 days. A binder dissolves once the policy is issued.

Binders will often be required by lenders when a business takes out a loan. For example, if you are buying a new building and taking out a loan, the lender will often require you to insure the building against physical damage under a commercial property policy and will want to see the binder as proof of that coverage.

A binder may be issued by an insurance company or by an insurance agent on the insurer's behalf. An agent can issue a binder only if they have been afforded binding authority (the authority to initiate coverage) by the insurer.

Insurance brokers don't have binding authority because they don't serve as representatives of insurers. A broker may issue a binder, but the document will not be valid until it is signed by an underwriter or other authorized representative of the insurer.

A binder provides general information about your company, your insurer and your agent. This includes:

  • Your agent's name, address and contact information
  • Your company's name and address
  • Name of your insurer
  • Binder number
  • Binder effective dates
  • Policy number
  • Description of your operations, vehicles or property to be covered.

 

A binder is typically divided into sections, each applicable to a specific type of coverage, such as general liability or workers' compensation. For each coverage you have purchased, the binder should list the limits provided, the coverage forms that will be included, and key endorsements that will be attached to your policy.

 

Certificate of insurance

A certificate of insurance is a single-page document that lists active, in-force insurance policies for a business.

Certificates of insurance are often requested when one business engages the services of another and wants proof that the other business has secured the necessary coverage. 

A standard certificate will list all of your coverages, and the name of the insurance company and policy effective date and expiration.

A certificate of insurance contains separate sections for different types of liability coverage listed, such as general, auto, umbrella, and workers' compensation. "Insured" refers to the policyholder, namely the person or company who appears on the certificate as being covered by the insurance.

In addition to coverage levels, the certificate includes:

  • The policyholder's name.
  • The policyholder's mailing address.
  • A description of what is insured.
  • The name and address of the insurance company, as well as contact information for the insurance agent or broker or their contact person.

 

Having a certificate of insurance shows potential clients or business partners that your organization is insured. That means that in the event of an unforeseen scenario like an injury or property damage, there is minimal risk of out-of-pocket payouts or unpleasant and expensive litigation, for you or your customer.

Thank you for visiting the Partners Insurance Agency blog. We hope you found our content helpful and informative.


Posted 3:00 PM

Tags: insurance binder, certificate of insurance, coi
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016

  • insurance(99)
  • homeowners insurance(44)
  • auto insurance(40)
  • business insurance(29)
  • home insurance(11)
  • boat insurance(8)
  • workers compensation(8)
  • insurance claims(8)
  • liability insurance(7)
  • flood insurance(6)
  • liability(5)
  • additional insured(5)
  • commercial liability insurance(4)
  • d&o insurance(4)
  • umbrella insurance(4)
  • hurricane preparedness(4)
  • commercial auto insurance(4)
  • renters insurance(4)
  • insurance discounts(4)
  • teen drivers(3)
  • vacation rental insurance(3)
  • business owners policy(3)
  • tria(3)
  • small business insurance(3)
  • insurance coverage(3)
  • water damage(3)
  • summer safety(3)
  • workplace safety(3)
  • commercial insurance(3)
  • commerical insurance(3)
  • covid-19(3)
  • uber(2)
  • non-owned auto insurance(2)
  • drunk driving(2)
  • employee fraud(2)
  • terrorism risk insurance(2)
  • business owners insurance(2)
  • insurance liability(2)
  • freezing pipes(2)
  • halloween safety(2)
  • auto accident scams(2)
  • holiday safety(2)
  • natural disasters(2)
  • contractors(2)
  • moving(2)
  • dog liability insurance(2)
  • forced-placed insurance(2)
  • claims process(2)
  • buisiness insurance(2)
  • general liability(2)

View Mobile Version
Facebook
Twitter
LinkedIn
Carriers
logo, company name
text, logo
Carriers
logo
icon
logo, company name
PIA

Resources

Home About Us Get a Quote Customer Service Contact Us
a drawing of a face

Contact Us

icon
  • 4040 W Newberry Road Suite 950
  • Gainesville, FL 32607
  • Office: 352.332.0180
  • Fax: 352.378.5820
© Copyright. All rights reserved.
Powered by Insurance Website Builder