Liability insurance is one of the most popular forms of insurance policy, since it protects you from crippling financial costs. What liability insurance basically does is to pay for the other party’s losses while leaving you uninsured. For example, in the case of third party liability auto insurance, if you are involved in an accident, then the liability insurance will pay for the damages for the other party’s car while you will have to shoulder your own repair costs. This is in contrast to full coverage liability insurance, under which both you and the other party are covered by the policy.

The reason liability insurance is so attractive boils down to a question of cost – this form of insurance is much cheaper than full coverage, and the difference in premiums may be enough to cover your own losses.

There may be times when you need to ascertain whether or not another party has liability insurance. For example, if you hire workers to do repairs on your house, you may need to determine if they are covered in case your premises are damaged. In this case, you can ask them to present a liability insurance certificate as proof that they are covered by insurance. However, such certifications are commonly requested by businesses to provide evidence that the parties they have dealings with are insured.

A liability insurance certificate is usually issued by the insurance company and provides information on the types of policies the insured has; the limits of the insurance; and other key coverage details. It should be noted that the certificate is issued purely for informational purposes and confers no rights to the party receiving the certificate.