Insurance Policy
What Is an Insurance Policy?
An insurance policy is a document that outlines an arrangement by an insurance company (aka carrier). It provides a guarantee of compensation for specified loss, damage, or death in return for payment of a premium.
What Is a Business Insurance Policy?
A business insurance policy is your written promise of protection. You pay money (called a premium), and in return, the insurance company (aka carrier) pledges to help pay for certain types of loss, damage, or other covered events.
It’s your safety net in writing, so you can focus on confidently starting and growing your small business.
What Does an Insurance Policy Cover?
An insurance policy outlines exactly what risks and losses are covered — these details depend on the type of coverage you choose.
For a small business, coverage can include customer injuries, property damage, or legal fees if you’re sued. Always review your coverage details thoroughly to understand what’s covered (and what isn’t) to avoid surprises later.
What’s Included in an Insurance Policy?
A business insurance policy usually includes several key parts that explain how your coverage works, such as:
- Declarations page: Your name, policy number, and coverage dates
- Coverage sections: What’s protected and up to what limits
- Exclusions: What’s not covered
- Conditions: Rules for how the policy works
- Endorsements: Add-ons or changes that customize coverage
These sections combined paint a clear picture of your business’ overall liability protection plan.
Insurance Policy vs COI: What’s the Difference?
Your insurance policy is the full contract that lists every term, condition, and limit of your coverage. Your certificate of insurance (COI) is the short, friendly version that acts as proof of your coverage.
| Certificate of Insurance (COI) | Insurance Policy | |
|---|---|---|
|
Purpose |
Show proof of active insurance
|
Details all terms, limits, and coverages |
|
Length |
1–2 pages |
Dozens of pages |
|
Issued by |
Your insurance provider or broker |
Your insurance provider |
|
Includes |
Business name, coverage types, limits, effective dates, and additional insureds |
Full coverage details, exclusions, and endorsements |
|
Used for |
Showing clients, venues, or partners proof of insurance, plus additional insured status |
Understanding and managing your coverage |
|
When you get it |
After buying or renewing a policy |
At the time you purchase coverage
|
|
Legal standing |
Informational only; not a binding contract |
Legally binding contract between you and the insurer |
Purpose
Certificate of Insurance (COI): Show proof of active insurance
Insurance Policy: Details all terms, limits, and coverages
Length
Certificate of Insurance (COI):1–2 pages
Insurance Policy: Dozens of pages
Issued by
Certificate of Insurance (COI): Your insurance provider or broker
Insurance Policy: Your insurance provider
Includes
Certificate of Insurance (COI): Business name, coverage types, limits, effective dates, and additional insureds
Insurance Policy: Full coverage details, exclusions, and endorsements
Used for
Certificate of Insurance (COI): Showing clients, venues, or partners proof of insurance, plus additional insured status
Insurance Policy: Understanding and managing your coverage
When you get it
Certificate of Insurance (COI): After buying or renewing a policy
Insurance Policy: At the time you purchase coverage
Legal standing
Certificate of Insurance (COI):Informational only; not a binding contract
Insurance Policy: Legally binding contract between you and the insurer
Think of your business insurance policy as the full book — and the COI (sometimes called an ACORD COI) as the cover page that shows you’re protected.
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