What term refers to a document that serves as proof that an insurance policy has been issued and coverage is in effect?

The correct answer, a certificate of insurance, is a document that serves as evidence that an insurance policy has been issued and specifies the coverage that is in effect. This document is commonly requested by third parties, such as clients or other businesses, to verify that insurance is in force. It typically summarizes the key elements of the policy, including the types of coverage, limits, and the policyholder's information, making it a vital tool for demonstrating that adequate insurance coverage exists.

In contrast, the other choices serve different purposes in the insurance process. A policy declaration is usually the summary page of an insurance policy that provides essential information such as the insured's name, coverage details, and policy period but does not serve as proof of coverage to third parties. A coverage endorsement modifies or adds to the existing policy's coverage but does not function as proof that the policy itself is active. An insurance binder is a temporary agreement that provides proof of insurance until the official policy is issued, but it is typically of a more provisional nature and may not carry the same weight as a certificate of insurance when proving coverage to others.