Certified Supply Chain Professional (CSCP) Practice Exam

What is the purpose of a certificate of insurance?

1. To document the sale of the goods

2. To verify ownership of cargo

3. To confirm that insurance has been obtained for the cargo

4. To guarantee the timely delivery of goods

The correct answer is: To confirm that insurance has been obtained for the cargo

A certificate of insurance serves as an important document that confirms that insurance coverage has been secured for specific cargo. This certificate provides proof to various stakeholders, including shippers, consignees, and third parties, that the goods in transit are protected against certain risks. It details the type and extent of coverage, including liability and other insurance aspects relevant to the transport of goods. Providing this assurance is vital in supply chain management, as it helps mitigate financial risks associated with potential losses or damages during transit. In contrast, the other options are unrelated to the primary function of a certificate of insurance. Documenting the sale of goods pertains more to commercial agreements or invoices, verifying ownership of cargo is rather handled through bill of lading or ownership documents, and guaranteeing timely delivery relates to logistics and transportation performance rather than the insurance aspect of the shipment.