certificate of insurance (COI)

Definition

Document issued by an insurance company, it certifies that an insurance policy has been bought and shows an abstract of the most important provisions of the insurance contract. But it is not a substitute for the actual policy, and is normally a non-negotiable document-it cannot be assigned to a third party, and is unacceptable under the terms of a letter of credit and in making a claim. In life and health insurance a COI is issued to the members of a group insurance plan, evidencing their participation. In marine insurance (where cargo is insured against a floating insurance policy) COI serves to assure the consignee that insurance is in effect for the goods in transit and a proper policy will follow. Also called insurance certificate.